Relatively few MBAs will go on to become chief executives, but for those who do, the financial rewards can be huge. Those rewards got considerably less gargantuan this year, however. The top 10 CEOs of billion-dollar-plus companies who have MBAs collectively earned more than $278 million in the most recent fiscal year, down about 15 percent from last year's top 10.
The top 20 CEO MBAs include graduates from top-tier programs—half hail from Harvard, Stanford, and Columbia—but a fair number got their degrees at less prestigious institutions, including Indiana University and Mississippi State.
While total compensation declined, it's worth noting that a few of the highest-paid CEOs had take-home pay (which includes the value of newly vested stock and exercised stock options) that was higher—in some cases, much higher—than their total compensation. Cisco's John Chambers and JPMorgan Chase's James Dimon took home $37.9 million and $41 million, respectively, while McKesson's John Hammergren raked in $131.2 million, more than anyone on the list.
Methodology: The list was compiled by Equilar, an executive compensation research firm, based on an analysis of companies reporting CEO compensation as of July 31. It was limited to companies with revenue greater than $1 billion in their most recent fiscal year. Both total compensation and take-home pay include salary, cash bonus, and other compensation, such as perks. Total compensation also includes the grant-date fair value of options and the grant-date present value of stock awarded in the most recent fiscal year. Take-home pay excludes those amounts but includes the value realized by the vesting of previously awarded stock or from the exercise of previously awarded options.
1. Richard C. Adkerson
Title: President and CEO, Freeport-McMoRan Copper & Gold MBA: Mississippi State University Total Compensation: $35,294,023 Take-Home Pay: $39,527,576
Career Highlights: Adkerson earned an MBA from Mississippi State University in 1970. He launched his career in public accounting and was chief financial officer at Freeport-McMoRan Copper & Gold from October 2000 to December 2003. As CEO since 2003 and president since 2008, Adkerson also completed an advanced management program at Harvard Business School. He was a partner and managing director at Arthur Andersen, where he led the worldwide oil and gas industry practice, and he has served as a professional accounting fellow with the Securities and Exchange Commission.
Title: President and CEO, Stanley Black & Decker, formerly Stanley Works MBA: Stanford University Total Compensation: $32,570,596 Take-Home Pay: $7,410,126
Career Highlights: In addition to graduating from Dartmouth College, Lundgren earned his MBA from Stanford University. He has been CEO of Stanley Black & Decker since 2004 and president since 2010. Having been president of European consumer products at Georgia Pacific, Lundgren is also a member of the board of directors of the National Association of Manufacturers.
Title: Chairman, president, and CEO, McKesson MBA: Xavier University Total Compensation: $32,076,720 Take-Home Pay: $131,194,331
Career Highlights: Having joined McKesson in 1996, Hammergren has been a director since 1999, was elected president and CEO in 2001, and became chairman in 2002, according to the McKesson website. During his tenure, according to the site, the health-care company has more than doubled its revenue, to $112.1 billion, and expanded into new markets. In 2008, he co-authored the book Skin in the Game about the history of the health-care system in the U.S. Hammergren has an MBA from Xavier University and a BA in business administration from the University of Minnesota.
Title: President and CEO, NVR MBA: University of Pittsburgh Total Compensation: $30,879,812 Take-Home Pay: $23,001,165
Career Highlights: Having held posts as executive vice-president, chief financial officer, and treasurer for NVR in the past, Saville became CEO of the homebuilder and mortgage lender in 2005. The largest homebuilder based on market capitalization, the company’s sales have suffered during the recession. Still, Bloomberg Businessweek named Saville among the most powerful people in real estate in 2010. He earned his MBA from the University of Pittsburgh and a BBA from the College of William & Mary.
Title: Chairman, president, and CEO, Visteon MBA: University of Michigan Total Compensation: $26,918,489 Take-Home Pay: $5,677,470
Career Highlights: Stebbins began working at automotive component manufacturer Visteon as president and chief operating officer in 2005, and he was promoted to CEO in 2008, the same year he was elected chairman. He has held positions at Bankers Trust, Citibank, and Lear, where he spent 13 years in senior leadership roles, according to Visteon’s website. In addition to his MBA from the University of Michigan, Stebbins earned a bachelor’s degree from Miami University in Ohio, where he is a member of the Business Advisory Council.
Title: Chairman and CEO, Time Warner MBA: Stanford University Total Compensation: $26,136,831 Take-Home Pay: $19,792,835
Career Highlights: Armed with a BA from Yale University and an MBA from Stanford University, Bewkes first served as the chairman of the Entertainment & Networks Group for Time Warner from 2002 to 2005. Then, from 2006 to 2007, he filled the role of president and chief operating officer before earning the titles of chairman and CEO. Before joining Time Warner, he was the chairman and CEO of HBO.
Title: Chairman and CEO, Simon Property Group MBA: Columbia University Total Compensation: $24,559,899 Take-Home Pay: $6,509,742
Career Highlights: Simon earned his MBA from Columbia University. In 2010, Harvard Business Review recognized him as one of the world’s best-performing CEOs, according to Simon Property’s website. Before becoming chairman in 2007, he became CEO in 1995. He joined Melvin Simon & Associates, the predecessor company, in 1990 and has been a director of Simon Property Group since 1993.
Title: Chairman and CEO, BlackRock MBA: UCLA Total Compensation: $23,839,294 Take-Home Pay: $39,864,999
Career Highlights: In 1988, Fink founded BlackRock, which has become one of the world’s biggest asset management firms. Earlier in his career, Fink was one of the first mortgage-backed securities traders on Wall Street. He earned his MBA from UCLA in 1976 and joined First Boston after graduation.
Title: Chairman, president, and CEO, Target MBA: Northwestern University Total Compensation: $23,509,194 Take-Home Pay: $28,618,114
Career Highlights: Earning his bachelor’s degree from Carroll University in 1977 and his MBA from Northwestern’s Kellogg School of Management in 1979, Steinhafel spent 20 years working for Target before being named president in 1999. Having held various positions through the years, he became CEO in 2008 and chairman in 2009. The discount retailer brings in more than $65 billion in annual revenue and has more than 1,700 retail stores in 49 U.S. states, according to its website.
Title: Chairman, president, and CEO, Emerson Electric MBA: Vanderbilt University Total Compensation: $22,943,965 Take-Home Pay: $28,928,029
Career Highlights: Only the third CEO in Emerson Electric’s history, Farr has the distinction of expanding "Emerson’s position in global markets, increasing its focus on customer-oriented services and solutions, and investing in industry-leading technologies to enhance its long-term growth and market position," according to the company website. Farr joined Emerson Electric in 1981 and subsequently held various titles, including vice-president for corporate planning and development and the Hong Kong-based president of Emerson Asia-Pacific. He has been CEO since October 2000 and was named chairman in 2004. In addition to the MBA he earned at Vanderbilt, Farr holds a bachelor’s degree in chemistry from Wake Forest University.
Title: Chairman and CEO, Abercrombie & Fitch MBA: Columbia University Total Compensation: $22,510,786 Take-Home Pay: $19,152,148
Career Highlights: By recasting the fly-fishing company Abercrombie & Fitch as a teen clothing mecca, Jeffries saved an ailing brand, according to Women’s Wear Daily. Using racy ads and sometimes even live models at the front of stores, the company rose in popularity. Recently, A&F won attention for offering to pay the cast of MTV's Jersey Shore to refrain from wearing A&F-brand clothes. Jeffries earned his MBA from Columbia in 1968 before joining the now-defunct Abraham & Straus. In 1980, Jeffries founded the retail chain Alcott & Andrews, which went bankrupt in three years. He became CEO of Abercrombie & Fitch in 1992 and took the company public in 1996.
Title: Chairman and CEO, Amgen MBA: University of Pittsburgh Total Compensation: $21,138,133 Take-Home Pay: $7,213,926
Career Highlights: A director of Amgen since 1992, Sharer became CEO in 2000 and chairman in 2001. In the years he has worked for the company, he has served as its chief operating officer and president. Before arriving at Amgen, Sharer was president of the business markets division of MCI Communications, held several executive posts at General Electric, and served as a consultant for McKinsey. He earned his MBA from University of Pittsburgh.
Title: President and CEO, Aon MBA: Harvard University Total Compensation: $20,783,301 Take-Home Pay: $17,540,650
Career Highlights: Before joining Aon, Case worked for the investment banking firm Piper, Jaffray & Hopwood and the Federal Reserve Bank of Kansas City. He spent 17 years working at the consultancy McKinsey. In 2005, Case was elected president and chief executive officer of Aon.
Title: Chairman, president, and CEO, JPMorgan Chase MBA: Harvard University Total Compensation: $20,776,324 Take-Home Pay: $41,990,521
Career Highlights: Having received an undergraduate degree from Tufts University in 1978 and an MBA from Harvard Business School in 1982, Dimon gained experience at Citigroup, Travelers, Commercial Credit, and American Express. Beginning in 2000, Dimon was chairman and CEO of Bank One, and when Bank One merged with JPMorgan Chase in 2004, Dimon became president and chief operating officer of the new organization. He became CEO in 2005 and succeeded Bill Harrison as chairman at the start of 2007.
Title: Chairman and CEO, Abbott Laboratories MBA: Stanford University Total Compensation: $20,023,899 Take-Home Pay: $15,511,389
Career Highlights: Joining pharmaceutical giant Abbott in 1984, White became CEO in 1998 and chairman in 1999. In addition to other endeavors, White is chairman of the dean’s advisory board at Northwestern University's Kellogg School of Management and is a member of Northwestern's board of trustees. He earned a bachelor’s degree in mechanical engineering and an MBA from Stanford University.
Title: Chairman and CEO, Bank of New York Mellon MBA: City University London Total Compensation: $ 19,379,257 Take-Home Pay: $9,647,670
Career Highlights: Kelly was chairman, president, and CEO of Mellon Financial when it merged in 2007 with Bank of New York to form Bank of New York Mellon. The combined global financial services company operates in 36 countries and serves high-net-worth individuals and corporations, according to the company’s website. It had total assets of $278 billion and a market capitalization of $32 billion at the end of June 2011. Before joining Mellon, Kelly was CFO of Wachovia, and he spent 19 years with Toronto-Dominion Bank. He also has experience in retail brokerage, banking, and securities trading.
Title: Chairman and CEO, Lockheed Martin MBA: Columbia University Total Compensation: $19,118,612 Take-Home Pay: $14,473,312
Career Highlights: Stevens graduated summa cum laude from Slippery Rock University, and he earned a master’s degree in engineering and management from the Polytechnic University of New York. With a Fairchild Fellowship, he earned an MBA from Columbia University as well. He is also a fellow of the American Astronautical Society, the American Institute of Aeronautics & Astronautics, the Royal Aeronautical Society, and the International Academy of Astronautics. Before becoming chairman and CEO of Lockheed Martin, Stevens held a variety of titles at the company, including chief operating officer, chief financial officer, and head of strategic planning.
Title: Chairman and CEO, Cisco Systems MBA: Indiana University Total Compensation: $18,871,875 Take-Home Pay: $37,896,888
Career Highlights: Chambers graduated from the Indiana MBA program in 1975 and worked for IBM and Wang Laboratories before joining Cisco in 1991. He was named president and CEO in 1995 and became chairman in 2006. Chambers has been vice-chairman of the National Infrastructure Advisory Council and was a member of President George W. Bush's transition team and education committee and of President Bill Clinton's trade policy committee.
Title: Chairman and CEO, Anadarko Petroleum MBA: Harvard University Total Compensation: $18,798,048 Take-Home Pay: $38,942,321
Career Highlights: Since the end of 2003, Hackett has been CEO of Anadarko Petroleum, where he became chairman in 2006. He was president of the company from 2003 to 2010, and he was president and chief operating officer of Devon Energy, which merged with Ocean Energy, where Hackett was also president and CEO. Before joining Andarko, Hackett was CEO, president, and chairman of Seagull Energy until its merger with Ocean Energy. He is an adjunct professor at Rice University.
Title: Chairman and CEO, W.R. Berkley Corp. MBA: Harvard University Total Compensation: $18,726,851 Take-Home Pay: $ 28,999,851
Career Highlights: Berkley earned a BS from New York University in 1966 and an MBA from Harvard University in 1968. He is chairman and CEO of W.R. Berkley Corp., a financial services company he founded in 1967 that focuses on property and casualty insurance.