Generous executive compensation agreements benefit Kraft CEO

Illinois readers may be surprised to discover that in just his first year on the job, Kraft's new CEO earned somewhere in the neighborhood of $9.19 million. Generous executive compensation agreements often bear out these kinds of numbers for CEOs when their salaries, stock options and other benefits are added up. The man at the helm of Kraft saw a nearly $4 million increase in his stock awards in 2013 when compared to 2012 when he took over.

Even though the company saw a .3 percent decrease in revenue last year, its profits increased 65.3 percent. This was due, at least in part, to an accounting benefit connected to the company's benefit plans and compensation to retirees. Market share of businesses held by Kraft increased about two-thirds. In 2012, that percentage was only 40 percent.

Numerous news articles discuss the inequity of executive compensation when compared to workers who still struggle to make ends meet in an economy that is slowly on the mend. It may be said that Kraft's CEO earned substantially less last year than other CEOs, but that does not change the fact that CEO compensation is still seen as being relatively high in comparison to the rest of the population. Some businesses may even struggle to provide their executives these types of salaries and benefits.

Illinois businesses negotiating executive compensation agreements may identify with this issue. Businesses are often in the precarious position of having to weigh a CEO's compensation against the survival of the company. In some cases, the gamble is worth it. It could be some time before Kraft is truly able to make that determination about its CEO.

Source: Chicago Tribune, Kraft CEO pulls in more than $9 million in pay in 2013, Jessica Wohl, March 14, 2014

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