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CEO Pay Reflects Strong Stock Performance

The CEO Power Forum: TXU's Wilder nets $55 million package.

Fortnightly Magazine - June 2005

with multi-year performance goals. Includes restricted stock awards, long-term incentive plan awards (whether paid in cash or stock, but not stock options), and other long-term compensation.

3. Value of Options Exercised: Aggregate dollar value realized of options, warrants, or SARs during the period. As required by SEC regulations and as reported in the company’s filings, the value realized is the difference between the market value of the securities underlying the options and the exercise price of those options, as of the exercise data. Tax reimbursements are not included: These are included in Total Annual Compensation.

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Industry Metrics

Energy industry’s financial health  continues to improve.
All parts of the power and gas industry provided positive returns to shareholders in 2004. Figure 2 shows the total returns (price gains plus dividends) of several sub-sectors. Even merchant generators were up 24 percent, with NRG’s emergence from bankruptcy offsetting Calpine’s possible slide toward the same. 
Table 4 shows four key metrics measuring the relative financial health of the industry from the years 2000 through 2004. In 2004, the industry had lowered its overall debt level for the second consecutive year and was generating more cash flow to meet interest payments on that debt. Additionally, for the second year in a row, cash flow was high enough to meet capital expenditure needs without external financing. Most important for investors, profitability as measured by returns on common equity were back to double-digit levels for the first time since 2001.— E.M.

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