Lisa Su the First Woman to Become the World’s Highest Paid CEO, According to an AP Survey
Lisa Su of Advanced Micro Devices is the first woman ever to top The Associated Press’ annual survey of chief executive officer compensation: Her 2019 pay package was valued at US$58.5 million (FJ$128m) following a strong performance for the company’s stock during her five years as CEO.
Su’s compensation was more than four times the value of her pay in the prior year.
The gain was driven primarily by rewards for performance, including US$53m (FJ$ 116m) in stock awards and US$3m in stock options, which vest over several years. Su was paid a base salary of US$1m (FJ$ 2.18m) and a performance-based bonus of US$1.2m (FJ$ 2.62m).
Since Su took over as president and CEO at the chipmaking company in 2014, its stock has risen from around US$3 (FJ$6) to about US$55 (FJ$120), and AMD was the top performing stock in the S&P 500 in both 2018 and 2019. Overall, 2019 was one of AMD’s strongest years, as revenue, profitability and gross margin all improved and the company built up its portfolio of products.
Su’s compensation was US$13 (FJ$28m) higher than the highest-paid male CEO in the survey, David Zaslav of Discovery.
It was more than double the next two highest-paid women CEOs, Marilyn Hewson of Lockheed Martin, whose pay was valued at US$24.4m (FJ$ 53.43m), and Mary Barra at General Motors Co., with pay valued at US$21.3 m (FJ$ 46.64m).
Pay for women was up 2.3 per cent from last year, looking at the median; the median change for men was 5.4 per cent.
And, women remained significantly underrepresented as CEOs, heading just five per cent of S&P 500 companies. “Women are making incremental progress achieving leadership positions in the C-suite,” said Lorraine Hariton, president and CEO of Catalyst, a nonprofit organisation focused on women in the workplace.
“However, the fact remains that women CEOs still represent a disproportionately small share of corporate leadership, and women of color aren’t represented at all.” The 2019 pay figures are from before the coronavirus pandemic upended everything.
Hundreds of CEOs have already said they’ll forgo some or all of their salary.
And the turmoil in the stock market and the global economy could make it tougher for CEOs to meet performance targets this year.
Analysis
The analysis of executive pay at companies in the S&P 500 was conducted for the AP by Equilar.
The annual review began in 2011.
It includes only CEOs who have been in their job for at least two full years, in part to avoid the distortions caused by sign-on bonuses.
As a result, a couple CEOs with packages valued even more highly than Su’s were excluded.
Spotlight
While culturally, there’s been a recent spotlight on issues facing women in the workplace and increased pressure from stakeholders on companies to create inclusive work cultures, Hariton said structural challenges remain.
She said women continue to face entrenched barriers and stall out in middle management.
A total of 20 women were on the list, versus 309 men. For the analysis, executive data firm Equilar looked at companies in the S&P 500 index that filed proxy statements with federal regulators between January 1 and April 30, 2019.
To calculate CEO pay, Equilar adds salary, bonus, perks, stock awards, stock option awards, deferred compensation and other pay components that include benefits and perks.
Stock awards can either be time-based, or performancebased, meaning the
CEO has to meet certain goals before getting them.
To determine what stock and option awards are worth, Equilar uses the value of an award on the day it’s granted, as recorded in the proxy statement.
For options, this includes an estimate of what the award could be worth in the future.
Their actual value in the future can vary widely from what the company estimates.