Compensation for CEOs of large companies rose nearly 19% last year to $ 24 million, report says
CEOs of major U.S. companies received millions of dollars in bonuses or raises last year even as many companies saw their sales plummet and layoffs due to the pandemic, according to a new analysis.
Compensation for CEOs of the top 350 companies jumped nearly 19% in 2020 to an average of $ 24.2 million, according to the Economic Policy Institute, a liberal-leaning think tank. By comparison, compensation for core workers last year increased by around 4%. The typical CEO of large companies in 2020 earned $ 351 for every dollar earned by a typical employee, up from a ratio of 307 to 1 in 2019, according to EPI.
Economist Lawrence Mishel, who co-wrote the report, said some companies were touting pay cuts for senior executives to reflect the pandemic’s impact on businesses, but had little impact. “CEOs offering pay cuts during the pandemic grabbed favorable headlines, but were symbolic at best and bogus at worst,” he said in a statement.
Bonuses and salary increases distributed last year vary in size and by industry. Yum Brands CEO David Gibbs, for example, received a bonus of $ 9.5 million, while Norwegian Cruise Line CEO Frank Del Rio received an annual bonus of $ 3.6 million plus a one-time special payment of $ 2.8 million. Hilton Hotels CEO Christopher Nassetta received additional shares in the company valued at the time at $ 13.7 million.
Yum Brands, Norwegian and Hilton have all announced layoffs, time off or declining profits at some point in the pandemic. Hilton laid off 2,100 employees in June 2020.
Senior executives from Advance Auto Parts, Carnival Cruise Line and other well-known brandsas well as. Company officials justified the salary increases by saying they needed to increase compensation to prevent their executives from jumping ship.
Seek to curb the “excessive” remuneration of CEOs
Most CEO salary increases stem from boards of directors granting more shares of the company to senior executives, EPI noted. And as the stock market hit record highs last year, the CEO’s total compensation did the same. Most executives of large companies stock a significant portion of their salaries.
Rising CEO salaries have long been the target of corporate criticism. But those eight-figure paydays may seem even more out of place compared to the financial hardships many households experienced during COVID-19 last year.
Democratic lawmakers in Washington, DC this year introduced legislation to cut CEO compensation. The “law on excessive compensation of CEOs”who pay CEOs or other top-paid employees 50 times more than the median salary of workers. The bill makes its way to Congress, but faces a tough climb.
The EPI study accords with research published earlier this year by the left-wing Institute for Policy Studies, which found half of thelow-wage workers adjusted their CEO salaries last year, softening rewards for general managers during the pandemic while slashing the wages of average workers.