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.”
Yeah, well.
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.
In Simon’s case, this was a stock package that will be distributed over eight years that was worth US$132 million when granted last year. Like Cook’s bonus, it has already gained substantially in value.
While Apple shareholders overwhelmingly approved Cook’s compensation, Simon Property investors lopsidedly rejected Simon’s pay package at the annual meeting last month, with 73.3 percent voting against it, according to Institutional Shareholder Services. However, such votes aren’t binding. That means companies can do as they want, whatever shareholders say.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to