The rewards of mediocrity

Cowboy hat By Jim Hightower - Fri., 6/30/06

Let’s say you’re a sales person whose sales are down by a third this year, and you’ve brought in 15% less profit for your company. Now let’s say demand a 150% pay hike. How long would it take your boss to stop laughing . . . and then fire you for being silly?

But you’re not David F. D’Alessandro, CEO of the John Hancock corporation. While he had a bad 2002—with Hancock’s stock plummeting by a third and profits down 15%—Dave still got a pay hike of more than 150%, pushing his take-home to nearly $22 million. That’s a two-and-a-half times the CEO pay at competitors MetLife and Prudential, where his peers make do on only $8 million each.

D’Alessandro dismisses any criticism about his outlandish pay for poor performance. “I don’t determine how much I make,” he says, asserting that the board of directors decides that. Come on, Dave—corporate boards are notorious brother-in-law deals, made up of golf buddies and other CEOs who are all part of the same bunny hop, happily raising each other’s pay.

The board member who okayed D’Alessandro’s bonanza says that it was necessary lest other corporations lure Dave away, adding that he’s a “major-league talent.” How much demand is there for an overpaid CEO who drove his company into the ditch?