Tuesday, November 29, 2022

US officials receive record pay as historic income gap opens with employees

US officials receive record pay as historic income gap opens with employees

US CEOs are on track to reap record awards this year, raising the prospect of fresh conflict with investors and employees as the gap between their earnings and those of their employees rises to a historic multiplier in the wake of the COVID-19 pandemic. has gone.

For the 280 S&P 500 companies that have reported figures so far this year, the average CEO salary has increased from $14.2 million for 2021 to $13.5 million for 2020, according to data provider ISS Corporate Solutions.

Equilar, another data company that tracks CEO awards at the largest companies by revenue, said it grew an average of 20 percent to $14.3 million from the 196 companies reporting this year, the highest in 2020. has fallen to $12 million.

The largest executive pay packages to be announced so far include David Zaslav’s $247mn at Discovery, Pat Gelsinger’s $178.6mn at Intel, and Andy Jesse’s $212.7mn at Amazon – which were made public the same day that New York Workers voted to create Amazon. First American Federation.

CEO salary ratios, which compare a chief executive’s total annual salary to that of the average company employee, are on track to hit a record following a sharp stock market rally, which sees executives being far larger than their employees. Brings victory.

Equilar said the average ratio has gone from 192 for 2020 to 245 for 2021. If the trend holds, “this will be the largest year-over-year increase since the ratio became a required Securities and Exchange Commission disclosure during the 2018 proxy season,” Equilar said.

For example, Amazon said last week that Jassi’s salary for 2021 was 6,474 times that of its average employee. In 2020, his last full year as chief, Amazon founder Jeff Bezos earned 58 times more than the average employee.

Part of the jump in executive pay stems from bonuses halted or slashed in 2020 during the pandemic. For example, cruise operator Carnival did not pay its chief, Donald Arnold, an annual bonus in 2020, but a $6mn bonus given to him for 2021 raised his total salary from $13.3mn to $15mn. Meanwhile, other companies have rewritten executives’ bonus plans to ensure they don’t face major pay cuts due to the pandemic.

Brian Johnson, executive director of ISS Corporate Solutions, said bonus payments, many of them agreed as the pandemic began to ease, were a “big driver” of last year’s growth in the CEO’s package.

Some executives have offered concessions to investors seeking high rewards. General Electric Chair and CEO Larry Culp, who faced similar shareholder opposition last year, agreed in March to cut its annual equity incentive award by $10 million.

But shareholders have shown a willingness to challenge the big bonuses in many companies in 2022. Only 64 percent of Apple shareholders supported Tim Cook’s 2021 salary in February, with Norwegian Oil Fund and investment fund Engine No. 1 shareholders voting against the package.

Proxy advisory Institutional Shareholder Services has recommended that Discovery’s shareholders oppose Zaslav’s pay package.

Carl Icahn, activist investor, last week rebuked grocery store chain Kroger for its 909 to 1 pay ratio in 2020, which he described as “subliminal” and “obscene.” Kroger has yet to file 2021 salary figures.

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