CEO Pay: Hard Work or Pure Luck?

Risk and Reward... Last week's Dispatch, Real Estate CEO Compensation: Is It Fair? (May 23) generated some thoughtful comments.

One senior real estate executive of a national real estate services company (who requested anonymity) wrote, "It is kind of 'old school' to think that the brokers in a firm should make significantly and consistently more than the top executives. If the model is a small or regional firm, with a few top producers and an owner of the equity, then certainly that makes sense...

"But in a global world with all the responsibility (and liability) of public ownership, it seems a little naive to characterize the top guys at CBRE, Trammell, or JLL as 'just managers' with the presumptions that go with that. In fact, these guys should be judged on some level by the operating profits (or EBITDA) that their firms produce, or the expenses that they manage."

Executive recruiter Matt Slepin at the Terra Search Group in San Francisco writes, "Compensation has huge variations. Some of it has to do with skill and a lot to do with luck. I know people who do exactly the same thing in the same space with the same productivity who make far different compensation... People ask me all the time for comp #s, and it is so hard to generalize."

Here's what we know publicly. Go to Yahoo Finance. Enter a stock symbol, like CBG (or JLL or TCC), which displays a current snapshot of the company. In the left-hand column, click Profile. Toward the bottom of this page, you'll see the compensation paid to top executives.

Now click Insider Transactions (also in left-hand column). For example, you'll see that three CBRE directors (Freeman-related entities, Malek and Wirta) have sold $211 million, $36 million and $7.9 million of CBRE stock, respectively.

But these numbers pale in comparison to the sales by Blum Capital Partners, L.P., which took CBRE private before its second public offering in 2004. Blum-related entities have sold $1.1 billion of CBRE stock in the last two years. Now we're talking real money!

-- Peter Pike