America’s Most Overpaid CEOs

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8. Kevin Sharer
> Company: Amgen Inc.
> Total compensation: $21,138,133
> Change in stock price: -3.0%

Sales at the world’s largest biotech company rose from $14.6 billion in 2009 to $15.1 billion in 2010. Net income was higher by 2% to $4.6 billion. Amgen (NASDAQ: AMGN) has relied heavily on its anemia drugs, which have experience eroding sales over the past two years. The firm’s flagship drugs,  Epogen and Aranesp, fall into this red blood cell booster category. Largely because of worry over the future of these products, the stock has been flat for three years. Amgen’s margins also likely will be hurt by the introduction of generic versions of some of its drugs. Sharer made an extraordinary $26 million over the two years that ended in 2010. During that time Amgen’s shares were flat compared to a 65% increase in the Nasdaq.

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7. William Weldon
> Company: Johnson & Johnson
> Total compensation: $28,720,491
> Change in stock price: -4.0%

Johnson & Johnson (NYSE: JNJ) has been battered by product recalls that have hurt the company’s sales and tarnished its brand — one that was once among the most valuable in the world. In a period that ended last April, J&J had 22 product recalls in 19 months. Among the products recalled were widely sold Motrin and Children’s Tylenol. Last year’s damage has already spilled into this year’s results. In January, J&J had forecast 2011 earnings per share of about $4.85, well below analysts’ expectations of $4.99 a share for 2011. Weldon has spent a great deal of his time handling the recall scandal. He was grilled by a congressional committee last September and exchanged barbs with Food and Drug Administration officials over the recalls.

6. Robert Stevens
> Company: Lockheed Martin Corporation
> Total compensation: $21,897,820
> Change in stock price: -7.2%

The drop in Lockheed Martin’s (NYSE: LMT) share price did not just occur over the course of 2010. Its stock has underperformed the DJIA over the past five years as well. While revenue in 2010 was up to $45.8 billion from $44 billion the year before, net income fell to $2.9 billion — lower than any of the previous three years. The anticipation of federal defense budget cuts may have hurt Lockheed’s share price. But Wall St. expects sales overseas to be strong for the next several years. The blame for delays and test problems with Lockheed’s huge F-35 program do belong with Stevens. And while Stevens still has a job, in June the company said it would cut 6,500 workers. Stevens did not even take a pay cut.

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5. William Swanson
> Company: Raytheon Co.
> Total compensation: $18,787,343
> Change in stock price: -10.1%

Defense contractor Raytheon (NYSE: RTN) had net income of $1.8 billion in 2010 down from $1.9 billion the year before. Revenue was nearly flat at $25 billion. Raytheon shares have probably suffered because of concerns about the government’s defense budget. The firm’s pension liabilities are nearly $5 billion. Swanson’s compensation raises the question of whether a company in a troubled industry, even if relatively well run, should pay its CEO this much while shareholders do poorly. Swanson has made almost $58 million over the three years that ended in 2010. Based on how investors have done, that is excessive.