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Stock down as CEO compensation up

By Maxine Shapiro, KERA 90.1 business commentator

Dallas, TX – Some CEO's compensation is still on the rise in spite of faltering stock prices, lower earnings and a weak economy. Here are a couple of examples. I'm Maxine Shapiro with KERA Marketplace Midday.

Three days ago, Dallas-based Belo Corporation filed the company's proxy statement with the Securities and Exchange Commission. We now know that chairman, president and CEO Robert Decherd, was compensated $2.4 million in 2002, just a slight raise from his $1.1 million paycheck in '01. A boost of some sort was admittedly deserved. Belo stock went from about $15 to over $24 in early '02. But I always find it difficult to conceive a million-dollar raise. I wonder how many of his hard working staff received an increase?

Anyway, since November, the stock has been on the decline. A month ago, the company announced it would not meet its earlier earnings expectation of 18 cents a share - 15 to 16 cents would be more in line with projections. Then today Belo announced, oops, it would not be making the 15 cents - 13 cents might be more in line. That's what they made same time last year. Advertising for both their print and broadcast groups has dropped. The war.

But if you think a $1.3 million raise is a little excessive in these economic times, wait 'til you hear this: TXU Corporation, the largest electricity producer in Texas, the company that saw its stock plummet from $50 to $10 in just over a month, the energy producer that posted over a $4 billion loss, announced its CEO Erle Nye tripled his compensation in 2002. That same proxy statement filed with the SEC revealed Nye's total compensation for '02 was $7.8 million. In '01, he made a measly $2.9 million. For KERA Marketplace Midday, I'm Maxine Shapiro.

Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m. To contact Maxine Shapiro, please send emails to mshapiro@kera.org.

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