Crains New York - June 18, 2012 - (Page 13)

E X E C U T I V E PAY INSIDE FORTUNATE 100 2011’s highest-paid chief execs PAGE 15 ‘It was a quick rush to fame after years of toil’ —Michael Farrell, CEO, Annaly Capital Management, Page 14 Perks can be lavish, even nowadays Leslie Moonves got a screening room, but will shareholders keep paying the bill? BY AARON ELSTEIN Leslie Moonves spends a lot of time watching television and movies, which makes sense considering he’s the chief executive of CBS. So, in an effort to make it even easier for Mr. Moonves to sample his network’s wares from the comforts of his home, CBS last year built him a personal screening room. Cost to shareholders: $500,000. The perk came on top of the $68 million in pay awarded to Mr. Moonves, enough to make him New York’s best-paid CEO by a hefty margin of nearly $7 million. CBS wouldn’t comment on what exactly went into Mr. Moonves’ screening COST of room, but Liz Mr. Moonves’ Kershaw has a personal few ideas. She screening room is the manufacturers’ representative at the Society of Personal Cinema Architects and co-owner of Creative Marketing Associates, a Nashville-based firm that helps design top-of-the-line screening rooms. “A state-of-the-art 3-D projector, which I would imagine was used here, would cost at least $200,000,” Ms. Kershaw explained. She also noted that a high-quality screen, of the sort used at the Oscars or behind network news anchors, could run as high as $30,000, and high-quality leather seats can cost about $2,000 each.And then there’s the audio system. “I’d say if you didn’t install a topof-the line sound system in this kind of room, it’d be like putting cheap tires on a Ferrari,”Ms.Kershaw noted. Labor costs and assorted incidentals, like ensuring that the whole system can be operated from an iPad, make up the balance. “That,” she concluded, “is how how you build a $500,000 screening room.” $500K The $35M nest egg One of Wall St.’s biggest payouts goes to ... who? Meet Michael Farrell BY AARON ELSTEIN Say hello to Michael Farrell, the best-paid Wall Street CEO you’ve never heard of. He pocketed $35 million in compensation in 2011, enough to place him fifth on Crain’s Fortunate 100 list. Mr. Farrell’s compensation also put him $12 million ahead of JPMorgan Chase’s Jamie Dimon and $19 million in front of Goldman Sachs’ Lloyd Blankfein. Yet Mr. Farrell’s firm, Annaly Capital Management, is a mere pipsqueak compared with the likes of those giants. JPMorgan’s $19 billion in profits last year were 58 times more than Annaly’s $328 million. Goldman’s were 13 times higher. So is this a case of another piggish Wall Street executive stuffing himself silly? Some think so. Proxy advisory firm Glass Lewis gives Annaly an F for linking pay to performance and has urged investors to vote off the board those members responsible for setting Mr. Farrell’s compensation. Indeed, last year a majority of shareholders opposed re-electing one such director, but Mr. Farrell kept the person on the board anyway. Still, there is a case to be made for the extraordinary pay awarded to Mr. Farrell. For starters, his is one of the few Wall Street firms to be growing nowadays, not to mention rewarding shareholders. Revenue jumped by 32% last year and the stock returned 3%—quite impressive compared with the stock drops at Goldman and JPMorgan of 45% and 20%, respectively. More important,over the past five difficult years, Annaly’s stock has soared by 92%, nearly double the S&P 500 and quadruple its peer group, lifting its market value to $16 billion. What’s more, Mr. Farrell has successfully navigated through some of the most treacherous financial terrain imaginable. His firm’s specialty is investing in mortgages and related securities. Not only was it untouched by the mortgage crisis that nearly brought down the big banks, but it emerged bigger than ever by deftly profiting from the See MICHAEL on Page 14 See PERKS on Page 14 June 18, 2012 | Crain’s New York Business | 13 darren thompson

Table of Contents for the Digital Edition of Crains New York - June 18, 2012

Crains New York - June 18, 2012
Contents
Ad Index
Why won’t the NYPD give up world’s priciest parking lot?
Wall St.’s unsung $35 million chief exec
Perks on parade: Why CBS’ Les Moonves got a $500,000 screening room
Big investors are going bonkers for apartment buildings
Pencil exec makes his mark
For small firms,Facebook is just too big
Aereo CEO sends cable TV a message
Calliope plays a French tune

Crains New York - June 18, 2012