CEO pay rose 17% in 2021 but workers' checks trailed
NEW YORK » Even when regular workers win their biggest raises in decades, they look minuscule compared with what CEOs are getting.
The typical compensation package for chief executives who run S&P 500 companies soared 17.1% last year, to a median $14.5 million, according to data analyzed for The Associated Press by Equilar.
The gain towers over the 4.4% increase in wages and benefits netted by privatesector workers through 2021, which was the fastest on record going back to 2001.
The raises for many rank-and-file workers also failed to keep up with inflation, which reached 7% at the end of last year.
CEO pay took off as stock prices and profits rebounded sharply as the economy roared out of its brief 2020 recession. Because much of a CEO’s compensation is tied to such performance, their pay packages ballooned after years of mostly moderating growth.
In many of the most eyepopping packages, such as Expedia Group’s, valued at $296.2 million and JPMorgan Chase’s $84.4 million, boards gave particularly big grants of stock or stock options to recently appointed CEOs navigating their companies through the pandemic or to established leaders they wanted to convince to hang around.
The CEOs often can’t cash in on such stock or options for years, or possibly ever, unless the company meets performance targets. But companies still must disclose estimates for how much they’re worth. Only about a quarter of the typical pay package for all S&P 500 CEOs last year came as actual cash they could pocket.
Whatever its composition, the chasm in pay between CEOs and the rankand-file workers they oversee keeps widening.
Last year’s 17.1% leap for median pay of S&P 500 CEOs was the biggest since a 23.9% surge for 2010 compensation packages, according to the data analyzed by Equilar.
Consider Marry Barra, CEO of General Motors. Her industry was particularly hard hit by the shortage of computer chips.
Even so, GM’s board highlighted how the company still delivered record earnings before interest, taxes and some other items. The automaker also accelerated development of its electric vehicles. Those are two of the factors that influence Barra’s pay, and her compensation climbed 25.4% to $29.1 million.
JPMorgan Chase’s Jamie Dimon, whose compensation package valued at $84.4 million was the fifth-highest in the AP survey.
That was up 166.7% from a year earlier, and most of it came from an award of stock options valued at $52.6 million.