Strange, but true: One company actually receives positive press for its executive compensation. Media reports frequently tout Whole Foods’ pay policy, which caps the chief executive’s salary and bonus at 14 times the average worker’s pay. The Wall Street Journal, Slate.com, Harvard Business Review and BusinessWeek have all mentioned the pay cap, generally in favorable terms.
But they all omitted one thing: stock options. Last year, CEO John Mackey’s salary and cash bonus equaled $436,000, almost exactly 14 times the average worker’s $32,000 salary. But he made $1.8 million exercising stock options, and received another $460,000 because of a company error that allowed stock options to expire unexercised. The grand total: $2.7 million. Another $4.4 million of options have vested, so he can exercise them if he wants.