Revealing pay and perks

Our annual review of executive compensation

The average executive in the Triangle was paid enough last year to buy a Rolls-Royce. Or cover a year's tuition for 10 Duke University students. Or buy enough Wendy's Jr. bacon cheeseburgers to treat Raleigh to lunch and splurge for 31,215 Frosty desserts.

And that's just out of base pay: $345,164. Bonuses, stock awards and other perks more than tripled the average executive's compensation.

The News & Observer reviewed the 2006 compensation of 110 senior executives -- not just CEOs -- at 24 publicly-traded businesses with headquarters in the Triangle. Despite more disclosure and years of hand-wringing about the gap between what bosses make and workers take home, a deep divide remains.

At the top, we found big paychecks, jet travel, country club memberships and, for Progress Energy CEO Robert McGehee, goodies such as free car washes. Carolyn Logan, CEO of Salix Pharmaceuticals, saw her base salary jump 43 percent to $615,000. Carol B. Yochem, an executive vice president at First Citizens in Raleigh, received a $135,000 bonus -- the second installment of an incentive she got for joining the company in 2005.

The highest-paid executive was Frank Plastina, who became CEO of Tekelec in February 2006. Plastina was paid $8.7 million to run the phone-gear maker, which had a 6.7 percent stock gain in 2006.

Our review was aided by new rules that require public companies -- the only ones that must divulge executive pay -- to provide more information. The regulations put in place by the Securities and Exchange Commission pull back the curtain on cash, stock and other incentives that senior bosses receive.

They also complicate annual comparisons. Because companies had to tell more in 2006, it's hard to fairly contrast total pay in 2005 and 2006.

Here's one statistic, though: The average base salary for executives at the Triangle's public companies rose 9.5 percent in 2006, according to The N&O's analysis. Overall, the average wage in the Triangle rose 4.9 percent to $42,328, according to state data.

Boards of directors, which set compensation for executives, say that richer rewards are necessary to attract top talent. Pay packages, they say, must be lucrative to offset pressures that come with the corner office.

Plastina's compensation was inflated in 2006 because he got "a startup incentive package in his first year, and it's not recurring," said Tekelec spokeswoman Joni Brooks. His total pay was just above the median, $8.2 million, of 350 of the largest U.S. companies reviewed by Mercer Human Resource Consulting.

Of course, it doesn't always take huge salaries or fancy cars to motivate workers. When we asked the rank-and-file to tell us what works for them, we heard a lot about caring employers. And this favorite from Ted Schleich of Raleigh: "a boss who really knows what he is doing."