Apple CEO Tim Cook earned almost $100 million last year, but following pressure from company shareholders, he requested – and received – a 50% cut in his benefits package this year. And he is not alone: in “MarketWatch” it is reported that at least Three out of 10 and six out of the 100 highest-paid CEOs in the US have come under fire for their pay, agreeing to cut their pay and benefit packages.
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Shareholder groups and organizations, such as As You Sow, are working to reduce executive pay both publicly and behind closed doors in meetings with executives. “I think we will see lower pay packages this year,” said Rosanna Landis Weaver, director of fair pay and executive compensation at As You Sow, ahead of the release of the organization’s report of the most overpaid CEOs. “If there is a sustained downturn in the economy, I don’t think the shareholders will tolerate the disconnection of salary from performance,” she added.
However, according to the organization’s new data, there is still no change in the situation: executive pay packages have continued to grow, along with the gap between CEO pay and median employee pay. According to the “As You Sow” report, progress on the issue is being held back by large institutional investors , who vote in favor of large pay packages. “If it weren’t for the continued weak response of a handful of the major players, the message that shareholders are fed up would have been clearer.”
Among the highlights: Jamie Damon and Andy Jaci
The median salary of the 100 most overpaid CEOs is about $23.5 million – an 8% increase over the previous year. David Zaslav, CEO and president of Warner Bros. Discovery, tops the list, with a salary of $256.6 million per year – 2,972 times more than the median salary in the company, which is approximately $82,960. Warner Bros. Discovery claims that Zaslev may not see much of that amount because it is based on options given to him as part of a contract extension in 2021. “The vast majority of the amount is theoretical, as it is based on a one-time grant of options that will begin to provide profit to Zaslav only if the company’s share price more than doubles, which represents more than $50 billion of added value for shareholders,” explained the company’s spokesperson .
Between Zaslev and Cook, at the top of the list of CEOs are also Fabrizio Freda, CEO of Estee Lauder cosmetics company, Jay Snowden – CEO of the gaming company PENN Entertainment, Pat Gelsinger, CEO of Intel, CEO of Booking Glenn Vogel, Jamie Dimon – Chairman and CEO of JP Morgan, and also CEO of Amazon, Andy Jassy.
JPMorgan shareholders last year voted against a large bonus for Damon, and the company announced that he would no longer receive “special awards.” Gelsinger’s base salary was cut by 25% and changes were made to the way stock-based benefits are awarded. Intel says that “73% of the benefits given to Gelsinger are based on performance, so Pett will not realize a significant part of his compensation unless there is significant and long-term value creation for the company.”
Wages are climbing and the gaps are growing
It is not clear to what extent the cuts in salary packages and benefits create a change. In the “As You Sow” report, examples are given of how shareholder votes led to a change in the salaries of senior executives in several companies, including Chipotle and Hilton Hotels, but the salaries of CEOs in the economy continued to rise, as did the salary gaps within the companies.
At Amazon, the salary ratio between the CEO and the average employee is 6,474 to 1 – CEO Jassi’s salary package amounted to $212.7 million, while the median salary in the company is $32,855. The company’s spokesperson claims that the source of the gap is a stock grant that Jassi received when he assumed his position, which was spread over a period of ten years: “What it is equal to in terms of annual compensation is competitive with that of CEOs in other large companies, and was approved by Amazon’s board of directors.”