CEOs
from 322 companies in the S&P 500 received median pay of $13.7 million in
2020, the Wall Street Journal found.
CEO pay
increased 15% over 2019 thanks to recovering stock prices and
performance-linked awards.
Increasing
numbers of shareholders are voting down proposed changes to executive
compensation.
CEOs at more than
300 of the top public companies in US received median pay of $13.7 million in
2020, up 15% from $12.8 million the year before, according to an analysis by the Wall Street Journal.
Executive pay rose thanks to a revived
stock market and changes to compensation structures. Less than 10% of total pay
was accounted for by salary for most CEOs, the Journal found. CEOs instead
added to their pay from increases in the value of their shareholdings and performance-linked stock awards.
The analysis found executive pay increased
for 206 of the 322 S&P 500 companies included in the research, using data
from analytics firm MyLogIQ.
Chad Richison, CEO of Paycom Software Inc.,
took home $211 million in 2020, and was the
highest-paid CEO in the data set, thanks to an award of 1.61 million restricted
shares in November, which could be valued at more than $2 billion by 2030 if
Richison meets stock-price targets.
The figure represents Richison's total compensation reported under the
Securities and Exchange Commission (SEC) rules, including salary, bonuses, and
multiyear stock and option awards. However, the future value of these awards
can be underestimated if stock prices rise.
While Richison was the highest-paid on the
list, other CEOs in the S&P 500 make far more money overall, such as Tesla
CEO and world's second-richest person, Elon
Musk.
Musk receives no annual salary or cash bonuses from
the electric-car maker, instead receiving performance-based stock options which
could net $55.8 billion if vested over the
next few years. Musk added $140 billion to his net worth in
2020, as Tesla's stock price surged by more than 650%, although he is unable to
access recent gains under his complex compensation plan.
Shareholders put off by rising CEO
pay
In a year marked by unprecedented unemployment and
damage to various industries, rocketing exec pay is turning off investors.
Shareholders have so far rejected proposed pay changes at a dozen major firms,
including at Starbucks, where investors cast a non-binding vote last month
against awarding CEO Kevin Johnson a one-time bonus of $1.86 million for the 2020 fiscal
year.
More than three-quarters of S&P 500 companies are still waiting to hold
annual votes, according to earnings data firm Equilar.
Consulting firm Pay Governance found that
companies disrupted by the pandemic were more likely to alter pay incentives for
their executives, although a majority of firms did not.
Frank Del Rio, CEO of Norwegian Cruise Line
Holdings Ltd., doubled his pay to $36.4 million while the company posted a $4 billion loss for 2020, for
example. Del Rio's compensation was partly tied to a three-year contract
renewal.
"We believe these changes were in the
best interests of the company and secured Mr. Del Rio's continued invaluable
expertise," a company spokesman told the Journal.
"Our management team took quick, decisive action to reduce costs, conserve
cash, raise capital" during the pandemic, they said.
Nearly 17% of firms have received less than
70% shareholder support for executive pay measures in votes held since
September, according to analysis by Equilar, up from 8% last year.