Whitacre's Worth

Ed Whitacre got a roughly 20% raise in 2005, as he became, through acquisition, AT&T's CEO. While his compensation rose to about $12 million, he earned a total — including long-term incentives and other items — of more than $17 million, up from about $14 million in 2004.

Whitacre's compensation has raised eyebrows before. Last April, grading CEO pay versus shareholder returns on a scale of 1 to 5, BusinessWeek gave Whitacre a 1. At the same time, Institutional Shareholder Services reported that AT&T outperforms 96% of companies in the S&P 500 index and 100% of telecom service providers.

Whitacre is finishing an employment contract signed with SBC in 2001 that was designed to retain him through this year, when he turns 65. That contract set his pay targets at the 75th percentile of his peers, with bonuses based on net income, cash flow and customer satisfaction targets (all which he exceeded last year). At AT&T's annual meeting in April, investors will vote on a proposal that the board's executive compensation committee provide clearer rationale for CEO pay. The board, chaired by Whitacre, recommends against it.