What a huge CEO salary would buy you

By Michael Brush

Barry Diller, chief executive of IAC/InterActiveCorp (IACI, news, msgs), oversees the company that runs Home Shopping Network -- where thousands of consumers tune in every day to spend (and thus save) money.

What do they buy? One popular item on HSN.com now is a cool digital camera that's small enough to fit on a keychain and sells for -- you guessed it -- $19.95(!) at the Home Shopping Network Web site.

Diller, we assume, doesn't have the $20 camera rattling around in his pocket. The IAC CEO, after all, took home $295 million last year in total compensation, making him one of the highest paid CEOs in the world.

But what do such numbers really mean? It's easy enough to figure out what you can do with a $50,000-a-year salary (not much, in most cities). Diller's $300 million? Not so easy.

So here it is, the MSN Money guide to what over-the-top CEO salaries will really buy.

And it starts with Diller and his $20 camera. He earned enough before taxes last year to buy every person in New York and Los Angeles one of those keychain digital cameras. The total of 14.7 million cameras would almost put one in the hands of every resident of Chicago, too.

Bringing up babies

Diller isn't the only CEO who last year raked in what, for the average worker, would be unfathomable buying power. Capital One Financial (COF, news, msgs) Chairman and CEO Richard Fairbank earned $280 million, according to Salary.com's CompAnalyst Executive. As with Diller's bloated pay package, Fairbank's pay was the result of a huge windfall from cashed-out stock options. Here's a look at his buying power:

• Americans are piling up credit card debt at Fairbank's company, some to help meet the rising costs of bringing up their children. Fairbank made enough money last year, before taxes, to raise 1,467 children through the age of 18, based on an Agriculture Department estimate that it takes $190,980 to do the job.

• His pay last year was enough to cover four years of public-university education -- with an average total tuition bill of $21,964 -- for 12,752 students.

• Fairbank earned enough to pay off the credit card debt of 32,000 Americans, based on an average outstanding balance of $8,536 in the country.

"What are they, kings? It's crazy," says Don Hodges, president of the Hodges Fund (HDPMX, news, msgs), a money manager who looks closely at CEO pay when assessing potential investments. "I just don't understand how these guys can even rationalize themselves. How can they look their employees in the eye?"

Hodges says the problem of excessive CEO pay usually comes about because boards of directors are too weak to stand up to pay demands from top executives. "Any board that would let this kind of thing happen is made up of wimps."

Minimum wage for 26,000 years

Here's another way to think about these enormous pay packages. Becoming a millionaire will probably only ever be a distant dream for the average American. But for these two CEOs, it was a dream that came true every single day last year, when each of them pulled in more than $1.1 million a day, before taxes. This assumes they worked all weekdays and took little vacation time -- as you might expect from a busy CEO.

Breadwinners in the average American household would have to work more than 51 centuries just to make what either of these two top execs earned last year alone. The average American household brought in $54,453 in 2004, according to the Bureau of Labor Statistics.

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