This is the second in a series of five articles, covering the top five highest paid CEOs in the US. Number two in the list is Richard Kinder, CEO of Kinder Morgan (KMI 3.46%), who made $1.1 billion (and again, as with the number one spot Facebook, that's not a spelling mistake, I did mean billion) in fiscal 2012, the latest year for which figures are available.

The parallels between Mark Zuckerberg and Kinder are remarkable. Like the co-founder of Facebook, Richard Kinder is also the co-founder of his company Kinder Morgan. And pay is not the only issue at Kinder Morgan; in fact, it's not really an issue at all. Again, like Facebook, there are issues with control at Kinder Morgan – though these issues are improving – and, like the billions "earned" by Zuckerberg, this compensation for Mr. Kinder is not really pay at all, it is simply a return on investment.

Even before this "payout," Mr. Kinder was one of the richest men in the U.S. He began his career as a lawyer, then, interestingly, worked for Enron, becoming its chief operating officer until he left in 1996 to found Kinder Morgan. He is also the chairman and CEO of Kinder Morgan Management (NYSE: KMR), Kinder Morgan Energy Partners (NYSE: KMP) and El Paso Pipeline Partners (EPB), acquired by KMI in October 2011.

Breakdown of compensation

For Mr. Kinder, if not for other executives at the company, compensation is very simple. In every year that I can remember, going back to the beginning of the millennium, he has earned a salary of $1 and nothing else. He does not have a pension or any other benefits or perks, and each year he appears to reimburse the company for his portion of health care premiums and parking expenses. The only other compensation I ever remember him receiving were some stock units granted in 2007, originally valued at $9.2 million. Guess what? Those had increased in value to $1.1 billion by the time they converted to shares in 2012.

What kind of performance led to that kind of increase in value? Kinder Morgan Energy Partners, the longest running of the Kinder Morgan companies in the partnership, saw its stock price rise from around $6 when it was founded to well over $80 today. The same kind of value increase has been seen at the other companies in the partnership.

Pay for other executives at the company, while not as modest as a $1 salary, is still modest in comparison with Kinder Morgan's peers. Salaries are capped at $300,000, and bonuses at $3 million. Bonuses are based on the achievement of cash distributions on KMP units and dividend payments from KMI. Encouragingly, given Mr. Kinder's association with Transocean, the operator of the Deepwater Horizon rig (he was director there until 2002), cash bonuses can be increased or decreased according to the achievement of environmental, health, and safety performance objectives, which are measured against industry averages, internal three-year average rates, and must experience no significant incidents in the firm's operations.

Who paid for the $1.1 billion?

Well, not the public investors, for a start. As the proxy notes: "any amounts related to these compensation expenses ... were borne by the Investors." The Investors, with a capital I, are the original stockholders, the founders of the company.

And the Class B Units that converted to Class B stock and then into Common Stock only had value if and when the amounts being distributed to the Sponsor Investors (funds advised by or affiliated with Goldman Sachs & Co., Highstar Capital LP, The Carlyle Group, and Riverstone Holdings, LLC, which hold the company's Class A shares) exceed their original investment. In other words, the Class B Units would be worthless if the original investors in the company didn't more than make their money back. Thus we should view Mr. Kinder's "compensation" as a return on investment.

The problem about control

Until December 2012, there was a very complex, very public-shareholder-unfriendly set of different classes of shares. Until then there were four classes of shares: Class A, Class P, Class B and Class C. Only classes A and P had any real voting power. But these multiple classes have gone away now, as they have all been converted to common stock. Indeed, this conversion triggered the "vesting" of Mr. Kinder's B units.

Prior to the conversion event, this level of control led to total board dominance. For example, Mr. Kinder had the right to appoint five board nominees, Goldman Sachs and Highstar Capital could appoint two nominees each, and The Carlyle Group and Riverstone Holdings could appoint one nominee each. While this level of control has not gone away, it has at least diminished. Now, Mr. Kinder can nominate four directors, the Sponsor Investors can nominate two directors, and there are four independents; clearly not a majority. In addition, Mr. Kinder now owns 23.3% of common stock, and is the largest single shareholder.

Moreover, the structure of the company -- with its related company partnerships, multiple stock listings, and Mr. Kinder's chairmanship of five separate but related companies -- seems unnecessarily complicated.

In most instances, this kind of control, the exclusion of public shareholders from the election of a majority of directors, Mr. Kinder's significant ownership, and the voting agreements in place with the Sponsor Investors would tell a very troubling tale.

However, in the case of Kinder Morgan, the ability to abuse control does not seem to be leading to actual abuse. While it would be more favorable to public shareholders for director elections to be open to all, thus far it does not seem to present a problem.

And Mr. Kinder's "pay" will return to $1 again next year.