5. James D. Sinegal
> Compensation to market cap: $60 / $1M market cap
> Compensation: $2.2 million
> Market Cap: $36.2 billion
> Company: Costco (NASDAQ: COST)
Many investors would say almost all of Costco’s success should be attributed to its co-founder and former CEO James D. Sinegal who retired at the start of this year. Sinegal still owns over 2 million shares. W. Craig Jelinek, former COO, took the top job upon Sinegal’s retirement. Costco operates 608 of its “warehouses,” which average 143,000 square feet each in the U.S., Puerto Rico, Canada, the U.K., Mexico, Japan, and Australia. Costco has grown into one of the world’s largest retailers with sales last year of $97 billion, and net income of $1.7 billion. As an indication of the velocity of its growth, in 2007, revenue was $71 billion and net income was $1.3 billion.
4. Jeff Bezos
> Compensation to market cap: $21 / $1M market cap
> Compensation: $1.7 million
> Market Cap: $78.7 billion
> Company: Amazon (NASDAQ: AMZN)
Jeff Bezos founded Amazon in 1994 and has been its CEO since 1996. Considering that he was only 48 when the company filed its last proxy, he will probably continue run the company for quite some time. Amazon is one of the most successful American startups of the Internet age. The company has completely transformed how people shop for products and services, which, until 20 years ago, were only available in stores. The accomplishments of Bezos has shaken retailing to it foundations. Bezos owned almost 88 million shares of Amazon, or 19.5% of the total, as of the latest proxy filing. His net worth was over $15 billion. Amazon’s revenue last year was approximately $48 billion, nearly double what it was two years earlier. Growth has continued at a phenomenal pace this year. Bezos has recently moved the company into the tablet PC and video on demand businesses. Amazon is also one of the world’s leaders in hosting e-commerce sites for companies that want to outsource the function.
3. Richard Hayne
> Compensation to market cap: $8 / $1M market cap
> Compensation: $31,000
> Market Cap: $4 billion
> Company: Urban Outfitters (NASDAQ: URBN)
Richard Hayne, who co-founded Urban Outfitters in 1970 and has been a director since 1976, does not need a salary. He owned 19% of the company’s shares as of the filing of the company’s last proxy. At the time, his net worth was approximately three quarters of a billion dollars. Compared to Hayne’s pay, directors and several of Urban Outfitters’ executives have high compensation. Directors made $307,200 last year. David W. McCreight, CEO of the company’s Anthropologie Group, made over $4.4 million. Despite a difficult retail environment, Urban Outfitters’ revenue rose to $2.473 billion in its last fiscal year from $2.274 billion the year before. Net income, however, fell to $185 million from $273 million. The company’s three largest divisions are Urban Outfitters, which had 197 stores at the end of its last fiscal year, Anthropologie, and Free People. Most of the stores target young adult clothing and apparel buyers.
2. John Mackey and Walter Robb
> Compensation to market cap: $6 / $1M market cap (Mackey)
> Compensation to market cap: $73 / $1M market cap (Robb)
> Compensation: $78,000 and $917,000
> Market Cap: $12.5 billion
> Company: Whole Foods (NASDAQ: WFM)
John Mackey, who co-founded Whole Foods, has been CEO since 1978. Walter Robb became co-CEO in May 2010. Whole Foods has been phenomenally successful in the grocery store sector because of its leadership in the organic and whole foods movement. Mackey has taken very modest compensation for several years. According to the latest company’s proxy, “Effective January 1, 2007, John Mackey, our Co-Chief Executive Officer, voluntarily reduced his salary to $1 and elected to forgo any future bonus and stock option awards. For fiscal year 2011, Mr. Mackey earned $1 in base salary and accrued $78,450 in paid time off during the fiscal year.” Co-CEO Robb received a restricted stock award in 2010, which brought his total compensation to $4,579,159, but his pay package dropped sharply in his first full year as CEO. As of the last proxy, Mackey owned 1.13 million shares and Robb owned 124,000. Whole Foods had 311 stores at the end of its last fiscal. Revenue in the latest fiscal year rose to $10.1 billion from $9 billion the year before.
1. Warren Buffett
> Compensation to market cap: $3 / $1M market cap
> Compensation: $492,000
> Market Cap: $189.2 billion
> Company: Berkshire Hathaway (NYSE: BRK-A)
Warren Buffett remains, in both the eyes of the general public and Wall Street, the greatest investor of his generation. At 82, he still runs the conglomerate he built: Berkshire Hathaway. The firm’s proxy states that Berkshire Hathaway’s compounded per-share book value annual gain from 1965-2011 was 19.8%, an extraordinary increase by almost any measure, particularly given the company’s size in recent years. Last year, Berkshire Hathaway had revenue of $143.7 billion and net income of $10.3 billion. In addition to its outright ownership of several companies such BNSF Railroad, one of the largest railroads in America, which employs 39,000 people, Berkshire owns large interests in, according to recent filings, American Express (NYSE: AXP), Coca-Cola (NYSE: KO), and IBM (NYSE: IBM). Buffett ranked No. 2 on the most recent Forbes 400 Richest Americans with a net worth of $46 billion.
Douglas A. McIntyre