NYT Targets Ariba's Executive Compensation

Courtesy of The FMKT Yahoo alumni board (which now counts 400 members), I learned of a piece in the NY Times this weekend targeting Ariba's CEO compensation. The piece opines that, "Among the companies that pay too much is Ariba Inc., a software concern in Sunnyvale, Calif. Its chief executive, Robert M. Calderoni, received $10.4 million in total compensation --including $7.6 million in restricted stock -- in the fiscal year that ended last Sept. 30. That was a 75 percent increase from 2004." The piece goes on to criticize Bob's compensation given Ariba's continued losses. But it fails to point out that on a cash basis, Ariba has been making money in recent quarters (a huge change from the days when Bob took over). Still, by my estimates, Bob is making roughly 5x to 10x what a top managing partner would make in a global consulting organization selling similar services -- but not software -- to Ariba. The CEO compensation of other similar-sized software company is all over the map based on company performance, making direct comparisons more challenging.

Jason Busch

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