It’s a story that’s not new because we’ve all heard it so many times before over the years. Only the names have changed. New guy takes over the top spot in the company. Results are nothing to write home about or brag about at the golf course, but top guy still gets super achiever raises. Any manager below him would have been fired  a long time ago, or money taken out of his check for poor performance. Where’s the justice?

Let’s hear it for the corporate boss who gets a 20% raise — or maybe 88%, depending how you count — when his company lost shareholders 6.4% for the year, saw returns trail the S&P 500 by 8.5 percentage points, and has seen returns trail its industry by 12 points over the last three years.

This man of steel — whose compensation can withstand the slings and arrows of muddled performance — is none other than the chairman and chief executive of steelmaker Nucor (NUE), Daniel R. DiMicco. According to the proxy filed this morning, DiMicco’s total compensation rose to $8.1 million for 2011, from $6.8 million in 2010. The biggest chunk of that change came from his cash bonus, which rose to $1.5 million from $540,000.

That’s using the standard compensation calculation required by the Securities and Exchange Commission. But like many companies chafing at the comp-disclosure bit, Nucor offers an “alternative” calculus —  and one that is even more eye-opening: By Nucor’s measure, DiMicco’s 2011 pay rose a whopping 88% over the prior year, to $5.3 million from $2.8 million. (The chief difference between the two measures is that the “alternative” attempts to exclude “compensation that may possibly be earned but is not guaranteed” by ignoring options and reducing the stock-award value by some voodoo the company doesn’t explain very clearly.)

 Shareholders, meantime, would have done better to invest in just about any major stock index during 2011 (the period covered by the proxy). The one place shareholders would have done worse, on a total-return basis, is the rest of the steel industry, and we do have to give Nucor some credit here. Nucor outstripped the steel industry by 28 points in 2011, after trailing it by 9 points in 2010 and by 107 points in 2009. DiMicco has run the company since 2000, and has been chairman since 2006; looking over the past three, five and 10 years, the company’s total return has trailed the steel industry’s by between 5 and 12 percentage points, and the S&P 500 by even more.
The shareholders of  this company would have been a lot better off by spreading the risk into other investments. Get #1 Strong Buy Picks from Zacks

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