Patricia Russo: Director Watch Director of the Day

November 12, 2015

Patricia Russo

Directorships: 4

Total director compensation, 2011–2014: $4,256,357

Average annual director compensation: $1,064,089

Average compensation per full year of service as director: $266,022

Patricia Russo
is known for her long and successful career in the telecoms industry. In 1981, she joined AT&T where she would eventually become president of the company’s business communication systems. In 1996, she guided the spin-off of the AT&T’s telecoms manufacturing arm into Lucent Technologies. In 2002 she became CEO of Lucent, bringing the company back to profitability after the burst of the dot-com bubble. She accomplished this by significantly reducing the size of the company, taking it from a 126,000 employee conglomerate to a company with just 31,800 employees. In 2006, Lucent merged with Alcatel, a French telecoms company. Ms. Russo stayed on as CEO of Alcatel-Lucent, but left the company in 2008.

Ms. Russo currently serves as a director for four public companies, Hewlett–Packard (HP), General Motors (GM), Merck, and Alcoa. She joined HP in 2011, GM in 2009, Merck in 1995, and Alcoa in 2008. She serves as chair of the compensation committees for both HP and Alcoa, and is a member of the compensation committees for GM and Merck. In addition, HP is currently in the process of splitting into two separately traded companies and Ms. Russo is slated to become the first chair of the board for the new HP Enterprises. From 2011 to 2014 Ms. Russo was compensated a total of $4,256,357 as a director, averaging $1,064,089 each year. On average, each directorship compensated her $266,022 for a full year of service.

On average, CEOs at these four companies were compensated $15.1 million, with the highest paid CEO belonging to HP, who was compensated an average of $17.3 million each year. The lowest paid CEO belonged to GM with an average annual compensation of $11 million. However, GM’s CEO has enjoyed the greatest increase in compensation since 2011. GM’s CEO compensation has increased by 109.8 percent, going from roughly $7.7 million in 2011 to $16.2 million in 2014. The increases in CEO pay for HP, Merck, and Alcoa during this same period are 18.73 percent, 87.52 percent, and 29.3 percent respectively.

The stock performance of the four companies during this period was underwhelming to say the least. Of the four, Merck performed the best, increasing its stock prices by 57.57 percent. However, this was still only barely on track with the S&P 500, which increased by 61.88 percent. Alcoa’s stock prices dropped and then returned to their previous levels during this period. The overall change in prices for Alcoa was negative .06 percent. HP saw its prices drop 6.11 percent. After its 2010 relaunch, which CNN Money referred to as the biggest IPO ever, GM’s prices dropped between 2011 and 2014 by 5.8 percent.

Support Cepr


If you value CEPR's work, support us by making a financial contribution.

Si valora el trabajo de CEPR, apóyenos haciendo una contribución financiera.

Donate Apóyanos

Keep up with our latest news