CEOs of US companies got biggest raise since 2013
The typical CEO at the biggest US companies got an 8.5 percent raise last year, raking in $11.5 million in salary, stock and other compensation last year, according to a study by executive data firm Equilar for The AP. That’s the biggest raise in three years.
The bump reflects how well stocks have done under these CEOs’ watch. Boards of directors increasingly require that CEOs push their stock price higher to collect their maximum possible payout, and the Standard & Poor’s 500 index returned 12 percent last year.
Over the last five years, median CEO pay in the survey has jumped by 19.6 percent, not accounting for inflation. That’s nearly double the 10.9 percent rise in the typical weekly paycheck for full-time employees across the country.
But CEO pay did fall for one group of companies last year: those where investors complained the loudest about executive pay. Compensation dropped for nine of the 10 companies scoring the lowest on “Say on Pay” votes, where shareholders give thumbs up or down on top executives’ earnings.
Other measures that would highlight the income gap between CEOs and typical workers are on the way, but governance watchdogs worry that Congress will kill or dilute their strength.
“It’s all out of whack right now,” said Heather Slavkin Corzo, director of the AFL-CIO Office of Investment, which says CEOs for major US companies make 347 times more than the average worker.
The top five
The highest-paid executive in the survey was Thomas Rutledge of Charter Communications, which absorbed Time Warner Cable and Bright House Networks last year to become the nation’s second-largest cable operator.
His compensation totaled $98 million, about $88 million of that from stock and option awards included as part of a new five-year employment agreement. For Rutledge to collect the full amount, Charter’s share price will need to rise 155 percent over six years. CEOs typically got more than half their total compensation from stock and option grants last year.
The lesson from the rest of the top five: How lucrative the entertainment business can be. No 2 on the survey was Leslie Moonves at CBS, who made $68.6 million. That included $63.9 million in bonus and stock awards the company’s board said he received for presiding over a 36.6 percent return for CBS shares in 2016 and for keeping CBS the top-rated network in the 2015-16 season, among other performance measures.
No. 3 was Walt Disney’s Robert Iger, at $41 million. That was 6 percent less than the year before, as slowing growth resulted in a bonus cut. Fourth-highest at $37.2 million was David Zaslav of Discovery Communications, whose networks include TLC and Animal Planet. Roughly 70 percent of that was from stock and option awards.
No 5 was Activision Blizzard’s Robert Kotick, whose compensation surged 358 percent to $33.1 million. That was almost entirely due to $24.9 million in stock awards he received as part of a new five-year employment agreement. To get them, the company’s earnings per share must hit a certain level, among other financial targets.
Kotick may not make the top five this year. His 2017 salary was cut by 26 percent to $1.8 million after many shareholders said they were upset about how much Activision Blizzard executives were making. The company also eliminated his guarantee for an annual salary increase. — AP