Tag: Compensation

Today’s Tech Founders Don’t Just Own the Company. They’re Also Getting Huge Pay Packages.

Archer Aviation Inc. is years from producing its only planned product, a four-passenger electric air taxi that the main U.S. regulator hasn’t yet certified. It hasn’t generated any revenue.

Still, the co-founders of this three-year-old company got a huge payday last month, a $99 million special stock award that stands to quadruple if Archer hits other milestones—thanks to a compensation package they negotiated before it listed publicly on Sept. 17.

For years, Silicon Valley was known as a place where leaders often bucked American corporate customs when it came to pay. Rather than receiving large stock grants and salaries, company founders like Facebook Inc.’s Mark Zuckerberg and Amazon. com Inc.’s Jeff Bezos took little or nothing. Instead, they benefited from the rising value of stock they got by starting their companies.

…Seven of the 10 most valuable compensation packages for U.S. public companies in 2020 were to CEOs of startups that listed publicly that year, according to public-company data-and-analysis firm MyLogIQ LLC. Five of those startups paid their CEOs more than any company in the S&P 500, an index that includes the largest corporations in the country.

The Largest Equity Grants of 2020

A year that included both a market recession and a rebound, 2020 saw equity compensation for named executive officers increase by 3.7% at companies in the S&P 500, according to data from public company intelligence provider MyLogIQ.

While median equity comp was up for executives in 2020, financial performance was not. At S&P 500 companies, the median revenue shrank by 0.7% in 2020 compared with 2019, according to data from Farient Advisors. Median earnings per share at S&P 500 companies also decreased in 2020, down 1.3% from 2019, said Eric Hoffman, vice president and leader of information services at Farient.

Nonetheless, Hoffman said he expects equity grants for this year and 2022 to fall in line with the increases of the last several years as companies do their best to retain talent.

Jet Perks Decline in a Year Marked by Travel Lockdowns

Jet perquisite spending reached a three-year low last year as top employees sheltered in place due to the Covid-19 pandemic. S&P 500 companies spent $93,071 on average per company on jet perks for top executives in 2020, down from $116,805 in 2019 and $115,729 in 2018, according to data from public company intelligence provider MyLogIQ.

“Companies took the tack of traveling less due to the personal health risk that might be involved in sending employees all over the world, but worker compensation and reputational risk also played into the decision to curtail jet use,” said Erik Nelson, director of executive compensation at Willis Towers Watson.

However, some companies opted to use corporate aircraft more frequently to fly executives to business-critical meetings while others extended corporate jet use permissions to directors and executives who didn’t previously have access for safety reasons, filings show. Other companies prohibited personal use of the corporate jet in 2020, opting to save trips for business purposes only.

Sources said the pandemic opened the door for compensation committees to reevaluate the need for corporate jet travel — how often and who uses the jet and how much the board should allow executives to spend on personal and business flights using the company’s aircraft.

The Largest Executive Cash Payments of 2020

Last year was an unusual one for executive pay as the impact of the Covid-19 pandemic upended boards’ best-laid plans.

Many companies publicized decisions to cut executive salaries to show solidarity with laid-off or furloughed employees, while others converted cash payments to equity to preserve liquidity. Year over year, average cash compensation for S&P 500 execs was down 2%, according to data from public company intelligence provider MyLogIQ.

But not for everyone. In some cases, the turmoil wrought by Covid resulted in large cash payments to executives in the form of severance pay, conversions from equity to cash, retention bonuses and other comp vehicles. While many boards may have expected compensation practices to return to normal for 2021, it’s unclear whether the pandemic has truly subsided; the need to tap into otherwise unusual pay methods may not be in the rearview mirror yet.

 

30 CEOs Who Made At Least 400 Times Higher Than the Median Employee Compensation in 2020

The U.S. Securities and Exchange Commission has long required public corporations to disclose the compensation of their top officers. The debate about whether chief executive officers are paid too much has gone on for decades. Many investors object to high CEO pay, which often runs into the tens of millions of dollars. Boards of directors claim that good CEOs are hard to find and that they have responsibilities for tens of thousands or even hundreds of thousands of workers.

Last year, the CEO of McDonald’s, Christopher Kempczinski, made 1,189 times the median compensation of his workers, according to an exclusive analysis of the pay of 294 public company CEOs done by MyLogIQ, which uses artificial intelligence and machine learning to examine SEC data. Kempczinski’s total pay was $10,847,032 in 2020. The company’s proxy stated, “McDonald’s is committed to a strong pay-for-performance culture that closely aligns the interests of executives with those of shareholders.”

McDonald’s CEO Made 1,100 Times What His Workers Did

The U.S. Securities and Exchange Commission has long required public corporations to disclose the compensation of their top officers. The debate about whether chief executive officers are paid too much has gone on for decades. Many investors object to high CEO pay, which often runs into the tens of millions of dollars. Boards of directors claim that good CEOs are hard to find and that they have responsibilities for tens of thousands or even hundreds of thousands of workers.

Last year, the CEO of McDonald’s, Christopher Kempczinski, made 1,189 times the median compensation of his workers, according to an exclusive analysis of the pay of 294 public company CEOs done by MyLogIQ, which uses artificial intelligence and machine learning to examine SEC data. Kempczinski’s total pay was $10,847,032 in 2020. The company’s proxy stated, “McDonald’s is committed to a strong pay-for-performance culture that closely aligns the interests of executives with those of shareholders.”

This Is the Highest Paying Company in America

Almost no one has heard of Alexandria Real Estate Equities, but it was the highest-paying company in America last year, based on an analysis of S&P 500 companies. The median worker pay for its 470 workers was $295,136, an increase of 90% from 2019.

The data on the pay figures comes from MyLogIQ, which provided it to The Wall Street Journal. One Alexandria Real Estate Equities chief executive officer made about 27 times what Stephen A. Richardson, co-CEO, did. Joel S. Marcus is executive board chair and founder.

Median Pay Shows How Companies Diverged in Their Covid-19 Response

Employees of Costco Wholesale Corp. (COST 0.45%) and Home Depot Inc. (HD -0.20%) saw demand for their services swell last year as homebound Americans stocked up on food and remodeled their homes. But Costco’s median worker made 16% less in 2020 than in the previous year while Home Depot’s made 21% more.

The divergence doesn’t mean one chain paid better than the other. It reflects how the pandemic and companies’ varied responses to it fundamentally altered the makeup of their workforces, fueling sometimes counterintuitive swings in median employee pay. (See what the median worker was paid at S&P 500 companies.)

Home Depot instituted a range of temporary pay increases to reward existing workers, lifting its pay structure. So did Costco, but that move was more than offset by a flood of new hires brought in to meet demand, tilting the balance of its workforce toward lower earners.