Dealmaker Weinberg cracks ranks of best paid executives for 2016
In a year when technology leaders again seized the top spots among America’s highest-paid executives, a scion of Goldman Sachs Group stood out.
John S Weinberg, 60, whose surname had been synonymous with the bank for decades, left as co-vice chairman in 2015. A year later he joined Evercore Partners Inc., reaping sign-on awards worth $124 million as of December 31. That placed him third on the Bloomberg Pay Index, a ranking of the best-compensated US executives for 2016.
He joins an exclusive club increasingly dominated by bosses at companies that are, at best, just a few decades old. He’s surpassed only by Jet.com co-founder Marc Lore, whose $236.9 million in awarded compensation last year was largely composed of money Walmart Stores Inc paid to buy his company, and Apple Inc Chief Executive Officer Tim Cook, who received $150 million. Google CEO Sundar Pichai, 44, and Tesla Inc’s Elon Musk, 45, round out the top five.
An old-school corporate adviser whose father and grandfather led Goldman Sachs, Weinberg is an odd fit in that quintet. For Evercore, founded in 1995, it was a rare coup to land a 32-year veteran from one of Wall Street’s most storied firms — one who brings relationships with some of the biggest US companies. As Evercore’s new executive chairman, he also gives founder Roger Altman more freedom from daily responsibilities.
“The concept of nine-figure compensation numbers can be startling,” said Steven Hall, managing director at Steven Hall & Partners, a compensation-consulting firm. “But these are executives whose proven talents make them heavily sought after by other firms.”
Weinberg, who was awarded $22.9 million in 2013, the last year Goldman Sachs disclosed his pay, has a “proven track record as a leader of investmentbanking businesses,” Evercore said in its annual proxy filing. His pay package for last year included $88.9 million in partnership units and restricted stock, of which about one-third is tied to performance, and the opportunity to collect $35 million in cash if targets are met. Some of it replaced awards from Goldman that were forfeited when he joined Evercore. It puts him ahead of other finance titans, including Goldman Sachs CEO Lloyd Blankfein and KKR & founders Henry Kravis and George Roberts, both 73.
Boards often heap big equity grants on executives when they join a company or sign new employment contracts, which can cause compensation to spike in that particular year. Examples include Weinberg and CBS CEO Les Moonves, 67, who’s ninth on the index and signed a deal that keeps him on the job until 2019. Similarly, executives who leave sometimes get severance and stock awards that vest ahead of schedule, such as Viacom Inc.’s ex-CEO Philippe Dauman, 63, who ranks eighth.
As a result, those three are less likely to be near the top of the index next year — a fate familiar to billionaire Patrick Soon-Shiong. He took over as CEO of cancer researcher NantKwest Inc in 2015 and got stock options that vaulted him to the top of the ranking for that year. A $602,308 salary was his only compensation for 2016.
The Bloomberg Pay Index tracks the 200 highest-paid executives who appear in filings from companies that submit compensation details to US regulators. The index adds salaries, bonuses, perks, options, restricted shares and changes in pension values that a person was awarded for the most recent year. All equity awards are valued at each company’s fiscal year-end. The index’s figures can therefore differ from those disclosed in filings, in some cases by a lot, depending on stock-price changes and dividend payouts.
Recurring annual grants of stock or options are included in the year they’re bestowed, not when they vest. One-time grants, meant to pay an executive for several years, are allocated over the life of the award as explained in regulatory filings. The top-ranked executives or their representatives declined to comment or didn’t respond to requests for comment.
Apple’s Cook, 56, received a megagrant of restricted stock units when he took over the iPhone-maker in 2011, scheduled to vest over 10 years. In filings, Apple’s board said the CEO wouldn’t receive additional equity compensation in those years. In that instance, the Bloomberg Pay Index annualized the award, which is partly tied to stock performance, over the intended lifetime. Cook’s 2016 payout was bigger than in previous years because of how Apple’s board structured the distribution of shares. Tesla’s Musk got a similar award in 2012 that’s meant to pay him for a decade.
Similarly, Charter Communications Inc. CEO Tom Rutledge, 63, got a 2016 pay package that the company valued at $98.5 million. The bulk came from option grants that are the only equity compensation he’ll get through 2020. The index allocates the options over five years and values his 2016 pay at $62.6 million, placing him 13th.
Other pay rankings that don’t annualize one-time awards are unlikely to feature Cook, whose 2016 compensation as reported in Apple’s most recent proxy statement was a comparatively meager $8.75 million. Rutledge, however, would likely end up near the top of any ranking for last year based on reported pay.