We Have a Winner: the $142 Million Pay Package

Marcus Licinius Crassus, the richest man in Rome, thanks to ancient stock options. (Here played by Lawrence Olivier)

Entertainment Pictures/Zuma Press

Marcus Licinius Crassus, the richest man in Rome, thanks to ancient stock options. (Here played by Lawrence Olivier)

Annual-meeting season is upon us, that time when corporations report how much they plan to pay their executives next year, and how much they paid them for the last. We seem to have a winner for last year: Charif Souki of Cheniere Energy Inc., with a 2013 pay package of $142 million. Souki beats usual suspects like Mario Gabelli of Gamco Investors Inc. ($85 million) and Larry Ellison ($78 million).

Cheniere is a transporter of liquified natural gas and a builder of gas pipelines. Its stock has advanced 30-fold since November 2009, as Bloomberg’s story reports. Cheniere’s financial statements proudly report that its executive compensation is very well aligned with its stock performance: It’s at the top of its peer group on pay, and at the top of the peer group on stock performance, too.

As a long-term proposition, Cheniere is a speculative bet. It didn’t make a profit in 2013, and most analysts expect it to keep losing money through 2016. Meanwhile, Souki has profited in the short term, selling $95 million in stock since the beginning of 2013 (including shares sold to cover taxes). The stock run-up has also benefited a cast of hedge fund investors like Eton Park and Third Point LLC.

There’s no way to know whether those investors will stick around to find out if a long-term wager on Cheniere will pay off. Is it churlish to mention that Energy Future Holding Corp.’s giant wrong bet that natural gas prices would keep rising wound up leading — just yesterday — to one of the biggest bankruptcies in history?


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