Is the DreamWorks exec's pay an embarrassment of riches? [This story first ran in V Life's February '06 issue.]
Typically, Hollywood execs clamor for placement on any magazine’s list, even when it’s something so audacious as Fortune’s list of America’s highest-paid female executives.
Ann Daly, COO of DreamWorks Animation, recently landed No. 5, earning $16.8 million in 2004 and having the distinction of being the only Hollywood exec to make it to the rankings, which were topped by eBay’s Meg Whitman. Trouble is, the company has not had a great year.
“I cringed when I read that,” says one senior female studio executive. “Ann is smart, and she’s probably worth it over the long haul, but part of the burden of being under the microscope is that it doesn’t look good when you have a bad year.”
DreamWorks Animation stock dropped from a high of $42 a share to $25, nearly $3 below its IPO price. A secondary offering set for last spring was postponed after the company was hit with a shareholder’s class-action lawsuit accusing the company of grossly overestimating its home-video revenue from “Shrek 2.” To accommodate the hiring of Lewis Coleman as the company’s new president, CEO Jeffrey Katzenberg and chairman Roger Enrico are giving up multimillion-dollar bonuses.
Still, Daly’s eight-figure haul comes with a few major caveats. For starters, $9.5 million is tied up in restricted stock, which vests over seven years.
“That is also subject to performance criteria, so that’s not in the bag,” says Bob Feldman, a DreamWorks Animation investor-relations spokesman. “A variety of metrics and financial targets need to be met.”
Daly, 48, does own $5.7 million of fully vested stock from the IPO. However, as is the case with DreamWorks founders Steven Spielberg, David Geffen and Jeffrey Katzenberg, she hasn’t yet sold a single share.
“That shows she’s very confident in the company,” says financial analyst Dennis McAlpine.
Until then, Daly will have to make do with her weekly paychecks. Last year, she earned $1.48 million in salary. Like all DreamWorks Animation employees, she was also given a bonus equal to three weeks pay, or $89,338.