An old question in a new economy.

• Position: Brief Article

IS ANY CEO WORTH $1 Million A Year? In the 1982 Winter edition of DIRECTORS & BOARDS, the headline of an article highlighting a D&B-sponsored roundtable asked this question of 15 large-company chairmen. Their answer: "It depends on how it's paid and why." Today, the answer is the same, but the amount is more, much more -- $10 million, $100 million, and even $1 billion.

In the sluggish economy of the early eighties, CEOs of the largest corporations earned total compensation averaging $919,000 per year. Eighteen years later, CEOs pull down ten times as much with an average pay package of $9.3 million. These amounts reflect both the surging stock market and the heated competition for top talent.

In today's compensation environment, a CEO is worth what the stock market says he's worth. Over the past two years, this amount has soared, with paper gains exceeding $100 million for a number of CEOs, in particular for several dot-com chiefs. These awards reflect the gravity-defying valuations of Internet companies. As a consequence, some highly visible top executives are leaving blue chip companies to take on the reins, and take up the stock, of start-up technology firms. These brand name CEOs bring instant credibility; in addition, they attract other talented executives who can transform a start-up into a real company.

To take up this challenge, experienced top executives are demanding large chunks of equity, and dot-com boards are shelling out large signing bonuses in the...