You call this a revolution?
Probably the most-heard complaint about big business these days, one seemingly tailored for the 99 percent, is how much money corporate CEOs routinely pull down. Many ordinary Americans probably cheered when stockholders — that is, the people who actually own public companies — finally began to say: “Enough.”
Despite a lot of noise from shareholders and a few victories at big names like Citigroup and Hewlett-Packard, executive pay just keeps climbing.
Yes, some corporate boards seem to be listening to shareholders, particularly on contentious issues like the seven-figure cash bonuses that helped define hyperwealth during the boom. Since the bust, corporate America on the whole has moved to tie executive pay more closely to long-term performance by skewing executive paychecks more toward restricted stock, which can’t be sold for years.
However, rewards at the top are still rich — and getting richer. Now that proxy statements for last year have been filed, the extent of executive pay has finally become clear.
The median pay of the nation’s 200 top-paid CEOs was US$14.5 million, according to a study conducted for the New York Times by Equilar, a compensation data firm based in Redwood City, California. The median pay increase among those CEOs was 5 percent.
That 5 percent raise is smaller than last year’s, but it comes at a time of stubbornly high unemployment and declining wealth for many ordinary Americans. Even corporate pay experts say that this is hardly the kind of change that will quell anger over the nation’s have-a-lots by the have-lesses, particularly in an election year.
“The bigger issues are there, still to be worked on, and those are the more difficult ones,” says Eleanor Bloxham, CEO of the Value Alliance, a firm in Westerville, Ohio, that consults on corporate pay.
Corporations are changing pay practices, Bloxham says, but not enough: “There is too much hype and too little substance.”
The latest list of the most richly rewarded executives expands on a preliminary survey Equilar put together for the Times in April, before many companies had submitted final regulatory filings for last year. While the earlier study showed the median pay package rising 2 percent from 2010 to last year, the final figures put the increase at 5 percent.
The list has many familiar names, like Lawrence Ellison of Oracle (US$77.6 million) and Leslie Moonves of CBS (US$68.4 million). However, a number of executives from smaller companies also landed near the top. Discovery Communications had about a 10th the revenue of Oracle last year, but gave its CEO, David Zaslav, US$52.4 million, the sixth-largest pay package in corporate America, according to Equilar.
Because the list includes only the CEOs of public companies, it does not capture the many billions that have been earned by top hedge fund managers and private-equity dealmakers in recent years. However. even in the more narrow universe of public companies, the complete Equilar study shows that there was not one, but two executives who had nine-figure paydays last year — the first time that has ever happened, Equilar head of research Aaron Boyd said.
David Simon, the top executive at the Simon Property Group, was the second-highest paid CEO last year, with US$137 million. He joined the exclusive nine-figure niche occupied by Timothy Cook, who succeeded Steve Jobs at Apple. Cook received a package valued at US$378 million. The pay of both Simon and Cook were bolstered by one-time rewards that the companies said would not be repeated and that are tied to future company performance.