CASH COW CEOs

Cable World, June 26, 2000 by K.C. Neel

Jack Welch. The chairman/CEO of General Electric our top guy, bringing home an eye-popping $140.1 million this year in salary, bonuses and options. While some stockholders snipe at what it costs to feed and clothe Mr. W., they should keep in mind that GE's shares and earnings per share have steadily risen under Welch's stewardship.

"Jack is one of the best managers of all time," says Marc Gabelli, manager of Gabelli Funds' Global Growth Fund. "He has proven he can deliver for shareholders. It doesn't matter how much money he makes. He's worth every penny."

But former compensation consultant and columnist for Bloomberg News Graef Crystal reports Welch lifted his salary and bonus in the 1990s by 45%, higher than the 32.2% return on GE's stock during the same time frame. That figure doesn't even count the $800 million in stock options he received.

GE's earnings have risen substantially over the past five years. In 1995, GE's earnings were a little less than $2 a share. In 1999, they were more than $3.20 a share.

And GE certainly appears to have a lovefest with the media. It has been named the world's most admired company by Fortune (1998, 1999); world's most respected company by Financial Times (1998, 1999); America's most admired company by Fortune (1998, 1999, 2000); and America's greatest wealth creator by Fortune (1998, 1999).

Steve Case. The America Online CEO stunned Wall Street by exhibiting the audacity -- and the dough -- to buy Time Warner earlier this year in a deal valued at $178 billion. The methodical among Wall Street players were floored by Case's chutzpah. Most analysts expected Time Warner to be the buyer, not the seller, in such a transaction.

The Feds haven't OKed the deal, but most Beltway observers expect it to be done by year's-end. In the meantime, AOL's value remains almost double that of Time Warner.

Case founded AOL in 1985, taking the company public in 1992 when the Internet was barely out of its institutional phase. Today, the company's online subscriber service counts some 22 million customers.

If that weren't enough, Case, 46, has elbowed TW chairman Gerald Levin and heir apparent Ted Turner out of the way to become chairman of the merged AOL-Time Warner. The elder Levin, 61, will serve as CEO.

Michael Eisner. Known as the penny-pinching operator of Walt Disney Co., Eisner is one of the world's most well-heeled executives, thanks largely to hefty stock options. In 1988, he earned $40 million, making him the highest-paid executive in the U.S. By 1998, Eisner was pulling down $576 million a year in salary and bonuses.

This year's booty will almost be pocket change for Disney's top Mouseketeer. According to CNET Investor, Eisner will bring home a paltry $750,000 in salary and $49.9 million in stock options.

"Is Eisner overpaid?" Invesco fund manager Mark Greenberg asks rhetorically. "Probably. But he has made a fortune for his shareholders over the past 15 years."

Eisner is credited with making the Mans Haus a worldwide conglomerate with investments in broadcast TV, cable, Hollywood studios and amusement parks.

More importantly, after a year of cheesy financial results, Disney shares are on the rise.

Gerald Levin. Having successfully navigated the changing seas at Time Warner since joining Time Inc. in 1972, Levin engineered the company's media mergers with Warner Bros. and Turner Broadcasting System. He's now herding Time Warner through its efforts to become a "new economy" firm following the completion of the merger with AOL.

"Gerry Levin is a very capable manager," says Invesco's Greenberg. "He's done a lot for shareholders over the past several years. I believe he will do a good job running AOL-Time Warner. He's Worth it."

For much of the 1990s, Time Warner's stock stagnated, leading to rumors that Levin would be pushed out as CEO. But his strategic acquisition of Turner and his cable operations investments are paying off. Even in the latest cable stock downdraft, Time Warner's stock is outperforming other MSO stocks.

George Bell. You have to give Bell credit for his ability to keep his head above water while Excite@Home owners AT&T, Comcast and Cox nearly sank the ship. Since joining @Home in 1996 and becoming CEO earlier this year, he's not only dealt with the company's tumultuous ownership structure, but had to wrangle marketing and technology glitches, open access and a stagnant stock performance.

Analysts queried by Multex.com are urging investors to buy and/or hold on to their Excite@Home shares, believing the company's losses will drop this year to around 17 cents a share. That's down significantly from a year-ago loss of $4.61 a share.

Charles Lillis. Lillis should be finished cleaning out his desk now that the merger between AT&T and MediaOne is complete. Lillis oversaw U S West's acquisition of MediaOne -- then called Continental Cablevision -- in 1996.

He also instigated one of the best cat fights in cable when he unceremoniously moved Continental's headquarters from Boston to Denver. Continental founder/CEO Amos Hostetter, who sold the company to U S West under the belief it would stay in Beantown, was so enraged he resigned from the company.