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Whole Foods: Spinning CEO Pay

This article is more than 10 years old.

Strange, but true: One company actually receives positive press for its executive compensation. Media reports frequently tout Whole Foods ' pay policy, which caps the chief executive's salary and bonus at 14 times the average worker's pay. The Wall Street Journal, Slate.com, Harvard Business Review and BusinessWeek have all mentioned the pay cap, generally in favorable terms.

But they all omitted one thing: stock options. Last year, CEO John Mackey John Mackey 's salary and cash bonus equaled $436,000, almost exactly 14 times the average worker's $32,000 salary. But he made $1.8 million exercising stock options, and received another $460,000 because of a company error that allowed stock options to expire unexercised. The grand total: $2.7 million. Another $4.4 million of options have vested, so he can exercise them if he wants.

A spokeswoman said the company wouldn't talk to Forbes.com because of a previous article, "Food Porn." To be fair, Mackey isn't some CEO scofflaw. Even with options, his pay is relatively low--especially considering the company's soaring stock price. And the firm awards 93% of its stock options to ordinary workers.

Nevertheless, Whole Foods manages to obscure Mackey's total pay package by ballyhooing the salary cap. Last November, Mackey wrote an editorial in Newsweek International, touting the company's pay transparency. Wages are public information within the company, so any checkout clerk can discover what her co-workers are making.

But Mackey had a curious memory lapse when he arrived at the subject of his own paycheck. "How much do I make? I don't really remember," Mackey wrote. In brackets, the magazine added his pay from the previous year--excluding stock options.