Image source: Equilar
Chief executive officers at the country’s biggest companies saw an average pay increase of 5% in 2020, even as the COVID-19 pandemic wreaked havoc on businesses across the globe.
According to the annual CEO Pay Study compiled by The Associated Press and executive data firm Equilar, median pay for S&P 500 CEOs last year was $12.7 million, a record high since they first began compiling the analysis 10 years ago.
The Associated Press noted that even as mandated lockdowns and other safety restrictions caused financial cutbacks at businesses, many company boards opted to implement changes to maintain executive pay levels.
As a result, the 5% growth from 2019 to 2020 outpaced the 4.1% median pay increase measured between 2018 and 2019, the study found.
According to the analysis, four of the 10 highest-paid CEOs last year also appeared in 2019’s list of top earners: Netflix’s Reed Hastings ($43,226,024), Comcast’s Brian Roberts ($32,713,267), Adobe Systems’ Shantanu Narayen ($45,889,954) and Discovery’s David Zaslav ($37,710,462).
Activision Blizzard’s Robert Kotick ($154,613,318), Regeneron Pharmaceuticals’ Leonard Schleifer ($135,350,121) and Charter Communications’ Thomas Rutledge ($38,670,620) have also made the top 10 in recent years, according to Equilar.
- 61% of CEOs received a pay boost last year, almost the same percentage as the 62% in 2019
- Long-term incentive plans tied to performance targets are a key reason why CEO pay packages have continued to rise in recent years
- Median employee pay went up just 2% between 2019 and 2020
- Fewer female CEOs were included in this year’s study, but the 16 women who did make the list had a higher median salary ($13.6 million) when compared to their male counterparts
- Pandemic-related consumer spending boosted CEO pay 20% in some industries, like food, beverage, household goods, tobacco and personal care products
- CEOs in the energy and healthcare sector saw pay decreases of 10.2% and 8%, respectively, a trend “consistent with the challenging year these industries saw.”
For its study, The Associated Press and Equilar looked at pay data for the 342 S&P 500 CEOs who have served at least two full fiscal years at companies that filed proxy statements with federal regulators between January 1 and April 30.
CEO pay was calculated by adding salary, bonus, stock awards, stock option awards, deferred compensation and other perks and benefits.
Sarah Anderson, head of the global economy project at the Institute for Policy Studies, told The Associated Press that given the public health crisis, 2020 “should have been a year for shared sacrifice.”
“Instead, it became a year of shielding CEOs from risk while it was the frontline employees who paid the price,” she added.
The Bloomberg Billionaire Index released earlier this year showed that the world’s 500 richest people added $1.8 trillion to their combined wealth in 2020, bringing them to a total net worth of $7.6 trillion.
The 31% increase was the largest annual gain in the index’s eight-year history.
Source: Equities News