The New York Times and Associated Press each released their annual CEO pay surveys, with the Times declaring that “It’s never been easier to be CEO,” finding that the median compensation among the 200 highest paid CEOs was $18.6 million, an increase of $1.1 million over 2017 or 6.3%. The Times survey, conducted by Equilar, reviews the Summary Compensation Table totals of the highest paid 200 CEOs of publicly traded companies with revenues over $1 billion who had filed their proxies by April 30, 2019. By contrast, the AP study, also by Equilar, found that the median S&P 500 CEO increased to roughly $12 million, a seven percent increase (roughly $800,000). The AP's study applies to CEOs in place for two full years and who also had filed proxies between January 1 and April 30, 2019.
As it typically does, the Times provides a supplemental interactive table that allows readers to sort by highest, lowest or increase in pay, revenue and total shareholder return, and pay ratio and median employee pay. Some takeaways from the article and data:
- The Times is particularly critical of Boards noting that “Despite all the structural forces aiding companies’ bottom lines and stock prices, boards continue to act as if C.E.O.s have unique powers to deliver better returns — and have gone to great lengths to compensate them.”
- Median CEO Pay increased 6.3 percent while the average private sector worker – presumably among all U.S. workers – increased 3.2 percent. (The AP article points out that the median increase for workers was 3 percent)
- CEO Pay increased despite steps to restrain it, including say on pay, the pay ratio and that that company boards, under pressure from some shareholders and advisory firms, have tied a lot more of a chief executive’s pay to a company’s performance.”
- Elon Musk was the highest paid CEO in 2018, and the Times note that he is paid “regardless of logic” since he already owned a fifth of the company, noting that his total reported pay was $2.2 billion, the largest ever, although the Times points out that to actually receive that value based on the performance shares granted, the company’s market capitalization would need to crease by 18-fold.
- The article criticizes companies for paying CEOs extra to complete mergers, noting that such work is an essential part of the job.
- Rather than simply explaining that actual pay received may differ from the Summary Compensation Value, the article states “CEO’s often get paid more than companies say.”
- By the numbers – among the 200 companies
- 4 had no increase
- 25 experienced a decrease
- 51 were new CEOs in 2018