Executive Pay

Stock options plus a bull market made a mockery of many attempts to link pay to performance

For Richard M. Scrushy, CEO of health-care company Healthsouth Corp. in Birmingham, Ala., 1997 was an outstanding year. He took home $106.8 million in salary, bonus, and--primarily--exercised options to become the third-best-paid CEO in BUSINESS WEEK's annual executive pay survey. While his compensation may boggle the mind, so has his performance. In the 14 years since he founded Healthsouth with three partners and $50,000, Scrushy has built it into the largest outpatient care center in the U.S., with a market capitalization of $11.4 billion. In 1997, the stock rose 31%, bringing its gain over the past 10 years to more than 1,200%. Says Scrushy: "Finally, I rang the bell and got paid."

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