The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 13% last year, easily surpassing the gains for workers at a time when inflation was putting considerable pressure on Americans' budgets.
NEW YORK — The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 13% last year, easily surpassing the gains for workers at a time when inflation was putting considerable pressure on Americans’ budgets.
But Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies, believes the gap in earnings between top executives and workers plays into the overall dissatisfaction among Americans about the economy. Hock Tan, the CEO of Broadcom Inc., topped the AP survey with a pay package valued at about $162 million.
In granting the stock award, Broadcom noted that under Tan its market value has increased from $3.8 billion in 2009 to $645 billion and that its total shareholder return during that time easily surpassed that of the S&P 500. It also said Tan will not receive additional stock awards during the remainder of the five-year period.
Although securities filings show Elon Musk received no compensation as CEO of Tesla Inc., his pay is currently front and center at the electric car company. Musk is asking shareholders to restore a pay package that was struck down by a judge in Delaware, who said the approval process for the package was “deeply flawed.” The compensation, mostly stock awards valued at $2.3 billion when granted in 2018, is now estimated to be worth around $45 billion.
Corporate boards often feel pressure to keep upping the pay for well-performing CEOs out of fear that they’ll walk out the door and make more at a rival. They focus on paying compensation that is competitive within their industry or marketplace and not on the pay ratio, Malafis said. The better an executive performs, the more the board is willing to pay.
After its investors gave another resounding thumbs down to the pay packages for its top executives, Netflix met with many of its biggest shareholders last year to discuss their concerns. It also talked with major proxy-advisory firms, which are influential because they recommend how investors should vote at companies’ annual meetings.
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