Top Paid e-Tail Execs. Performance-Based Compensation

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Got my November 2009 Internet Retailer issue in the mail yesterday, and in it they have published some interesting data on the 2008 compensation of top online retailers’ executives, including those who are in charge of marketing. Each executive’s compensation package represents a sum total of base salary (s), bonus (b) and stock compensation (sc).

The top 5 highest paid execs were: SVPs of Amazon.com S. Gunningham (seller services) and M.A. Onetto (worldwide operations) the total compensation of which was $5,044,125 and $4,598,107 respectively; CEO of Nutrisystem, J.M. Redling with $4,572,312; COO of BarnesAndNoble.com, M.S. Klipper with $4,191,511, and CEO of Newegg.com, T. Liu with $4,191,511.

Only 8 marketing execs were mentioned on that Internet Retailers list of 120+ executives, and here’s how their 2008 salaries rank:

  1. Leslie Kilgore (CMO, Netflix): $748,077 (s) + ? (b) + $1,334,546 (sc) = $2,089,703
  2. Thomas F. Connerty (EVP/CMO, Nutrisystem): $350,000 (s) + $0 (b) + $649,026 (sc) = $1,025,139
  3. Bradford Matson (CMO, BlueFly): $350,000 (s) + $227,038 (b) + ? (sc) = $585,269
  4. Houman Akhavan (VP of Marketing, US Auto Parts Network): $209,616 (s) + $173,990 (b) + $166,155 (sc) = $570,010
  5. Kristin M. Rogers (EVP of Sales & Marketing, PC Mall): $338,042 (s) + $22,689 (b) + $116,072 (sc) = $490,693
  6. Michael Rudolph (VP of Marketing, ThinkGeek): $213,337 (s) + $49,040 (b) + $188,533 (sc) = $450,910
  7. Sonya L. Lambert (VP of Marketing, Vitacost): $144,000 (s) + $107,496 (b) + $189,365 (sc) = $440,861
  8. Stormy D. Simon (SVP of Marketing & Cust Care, Overstock): $200,000 (s) + $0 (b) + $242,476 (sc) = $375,583

Note: whereever you see the question mark above, the data wasn’t published

As it is obvious even from the above list, much of the compensation is tied to results: both individual and company’s overall performance as well. Internet Retailer comments:

…the growing role of stock in top executives’ total compensation underscores the trend toward e-retailers linking executives’ pay to company performance.

That’s only accelerated in 2009, as online retailers responded to the economic downturn. “There is far more emphasis on incentive-based compensation versus base salary,” says Wendy Weber, president of executive recruitment firm Crandall Associates Inc. “Companies are asking for more skin in the game.”

Interesting observations. The affiliate marketing payment model is obviously given preference in this economic climate, and there is nothing strange about it. It keeps all parties engaged, and when there is performance and growth, everyone is happy.

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