How Has COVID-19 Impacted CEOs' Pay?

While thousands of companies across the world have been forced to cut job and salaries in the wake of the pandemic, some CEOs have continued to receive lush pay packages.

While thousands of companies across the world have been forced to cut job and salaries in the wake of the pandemic, some CEOs have continued to receive lush pay packages.

Last year, CEOs' base salaries climbed by 2% on average compared to 2019, according to data by AON. The most extensive salary hikes of up to 9% were seen at firms with revenue between $1 billion and $2.5 billion, followed by 5% for those with revenues of $5-10 billion. It's worth noting that a CEO's salary tends to be relatively small compared to their overall compensation, which typically includes their pay in stock, options, bonuses, and other remuneration. According to the Economic Policy Institute, CEO compensation has surged 940% from 1978 to 2018.

In the wake of the COVID-19 pandemic, however, some CEOs agreed to take salary cuts and pledged not to enact any layoffs. According to AON, of the 17% of companies making reductions, nearly 50% reduced the CEO's salary by 30-50%, with manufacturing firms witnessing the highest base salary cut. Billionaire Marc Benioff, CEO of Salesforce, urged his fellow CEOs to join his promise to put into place a “90-day layoff pledge.” Hotel chain Marriott reported that the late CEO Arne Sorenson gave up his wages for 2020, whereas his executive team took a 50% pay cut. Disney chief Bob Chapek also relinquished half of his $2.5 million base salary, while Chairman Bob Iger forfeited his $3 million annual salary. Within the banking sector, Citigroup cut outgoing CEO Mike Corbat's compensation for 2020 by 21% to $19 million, while Bank of America's chief Brian Moynihan's pay witnessed a 7.5% reduction to $24.5 million. However, these conglomerates are among only 3% of companies that reported either canceling or readjusting their CEO's bonus awards in response to COVID-19.

Looking at the CEOs of companies that permanently shut down, according to a Reuters analysis of securities filings and court records, about a third of over 40 large-size firms seeking U.S. bankruptcy protection during the pandemic gave bonuses to executives within a month of filing their cases. For example, American luxury retailer Neiman Marcus Group paid $4 million in bonuses to Chairman and CEO, Geoffroy van Raemdonck, in February 2020. The group then temporarily closed all of its 67 outlets in March and furloughed over 11,000 employees in April. Similarly, J.C. Penney, which has not reported a profit since 2010, paid CEO Jill Soltau nearly $10 million in compensation changes before its May 15, 2020 filing.

While the data is yet to be released on the bank balances of the world's topearning chiefs for 2020, Tesla's Elon Musk is likely to reign the list. The tech billionaire's $55 billion compensation package was the largest such performancerelated pay deal ever agreed between a CEO and a board.

Here are the five highest-paid CEOs in 2019 for context, according to data compiled by CGlytics in 2020.