In a moment of candor during an interview panel at the Aspen Ideas Festival in June, former CEO of Kroger Co. David Dillon called his nearly $13 million 2013 pay package “extreme” and “ludicrous.” The comments have just recently made national headlines.
“While I don’t really defend that amount, it even seems ludicrous to me,” said Dillon, who stepped down as Kroger’s CEO on Jan. 1 but remains chairman of the board. “It wasn’t ludicrous at the time they put it together until the stock price went up,” he said.
According to the Cincinnati Business Courier, Dillon stood as the third highest paid CEO in Cincinnati last year with a salary of $12,768,695. Still, his eight-figure compensation was in the bottom 25 percent of CEO pay among peer companies. He said that in comparison to what other executives make, his own compensation was “a little more reasonable” but still “pretty damn high.”
Dillon said executive pay in general “has gotten a little extreme, or a lot extreme.” He told the compensation committee at Kroger that “there needs to be some moderation” in regard to CEO pay.
Much of his pay was tied to Kroger’s remarkable stock growth during his tenure: In 2009, Kroger’s stock was around $22; today, it‘s over $50. CEO pay in the U.S. has been staggering upwards for decades. According to the Economic Policy Institute, from 1978 to 2013 CEO compensation (adjusted for inflation) has risen 937 percent, while a typical worker’s compensation growth during the same period has risen only 10.2 percent. Today, the average CEO pay stands at $15.2 million.
In June, the EPI reported, “Over the last three decades, CEO compensation grew far faster than that of other highly paid workers, those earning more than 99.9 percent of other wage earners.”
In a followup interview about the panel with digital news outlet Quartz, Dillon clarified that when he used the word “ludicrous” it was “mostly in reference to the fact that we had a run up in the stock price which made the year look bigger by comparison.”
“If you want to try to lead a large employee base — we have 375,000 associates — I wanted them to see that I had shown at least some restraint and had been as concerned about the success in the company and individual associates as I was about my own personal security,” he said.
