Category: 24/7 Wall Street

This CEO Made $211 Million Last Year, Highest in America

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, one American CEO made over $200 million. He was the only CEO to make over $100 million, according to an exclusive analysis of the pay of 294 public company CEOs done by MyLogIQ, which uses artificial intelligence and machine learning to analyze public company data.

Chad Richison is the president and chief executive officer of Paycom, which he founded in 1998. Its primary business is payroll processing. Last year, Richison made an extraordinary $211,131,206. This included his base salary, stock awards, short-term incentives and other compensation. The latter category includes the use of corporate aircraft, personal security and car lease payments. Richison made $21,138,558 in 2019.

This CEO Made 300 Times More Than His Workers

The U.S. Securities and Exchange Commission has long required that public companies post the annual compensation of their top executives in their proxies. In 2015, the SEC ruled that public corporations had to show how much their CEOs made in relationship with the median salary of their firm’s workers. The rule went into effect in 2017. The decision was part of the larger Dodd-Frank Act, which Congress passed as a sweeping reform of the federal’s governments financial regulations.

Using artificial intelligence and machine learning, MyLogIQ provides information about public companies. The firm has provided data exclusively to 24/7 Wall St. that covers CEO pay ratios from 294 public companies that have released their 2020 proxies. CEO compensation included salary, bonuses, stock awards, stock options, long-term incentives, short-term incentives and changes in pension values, all of which are required to be broken out by SEC rules.

The person who had the highest ratio of pay to the median compensation of his company’s employees was Michael F. Roman, the board chair and chief executive officer of 3M. His ratio was an extraordinary 308 to 1. In the 3M proxy, the company reported, “[W]e selected the median employee from among 96,902 full-time, part-time, temporary and seasonal workers who were employed as of December 31, 2020.”

Are These America’s Greenest Big Companies?

As the global environment deteriorates, a growing number of American companies have started to go, or have gone, “green.” There is no single definition of what that means. Some have begun to increase recycling. Others have cut greenhouse gas emissions. Still others plan to become carbon neutral. Among these measures needs to be a commitment to the environment at the board of directors level. Over the past several years, some of America’s biggest public corporations have added environmentally/sustainability-focused board committees.

These committees are designated by a small number of names, such as Corporate Responsibility Committee; Corporate Social Responsibility Committee; Environmental Committee; Environmental, Health and Safety Committee; Public Responsibility Committee; and Sustainability Committee. It is impossible to say exactly what these committees do without attending them or reviewing meeting transcriptions, but U.S. Securities and Exchange Commission disclosures from some offer direction about what they do and how they function. So do the governance statements of the companies themselves.

Sixty-two S&P 500 companies have had this type of board subcommittee for at least four years, according to MyLogIQ. Among the largest are Ford, Gap, Johnson & Johnson, JPMorgan and Nike.

These Are the Only 4 S&P 500 Companies Run by Women of Color

A great deal has been written about how the CEO jobs at America’s largest companies are almost exclusively held by white men. At the other end of the spectrum, the number of female chief executives of color is extremely small: only four.

According to research by MyLogIQ, which uses artificial intelligence and machine learning to analyze public companies, and which recently published “The Face of Corporate America,” white males make up 89% of CEOs at S&P 500 companies. Hispanics make up 3%, and people of Indian origin make up another 3%. Only 1% of CEOs are Black.

These are the four female CEOS of color:

Dr. Lisa Su is president and chief executive officer of chipmaker Advanced Micro Devices Inc. (NASDAQ: AMD). She was appointed to her current position in October 2014. She holds bachelor’s, master’s and doctorate degrees in electrical engineering from the Massachusetts Institute of Technology. Dr. Su has published more than 40 technical articles. She is a fellow of the Institute of Electronics and Electrical Engineers. She was listed as one of Barron’s “World’s Best CEOs” for 2019. AMD had revenue of $6.7 billion last year.

Only 11% of S&P 500 Companies Have CEOs of Color, and It Gets Worse …

A new study titled “The Face of Corporate America” examines the racial and gender figures for S&P 500 chief executive officers. The analysis was done by MyLogIQ, Public company intelligence provider, and it shows that only 11% of the CEOs among the companies are people of color. The gender figures and figures about female CEOs of color were even worse.

CEOs of color were defined as those who are Latin American, Black, Indian, Asian or of mixed race. Fifty-one were men of color, based on a specific count of the leaders.

Additionally, the analysis showed that only 6% were female. This translates to only four CEOs.

While much of the senior management and many board members at large companies have been mostly white, the research shows the extent to which the problem is pervasive. MyLogIQ examined 504 CEOs (because Alexandria Real Estate Equities, Globe Life, Howmet Aerospace and Synopsis have co-CEOs).

50 Highest Paid CEOs in 2019

As companies around the world struggle to mitigate the damage caused by the coronavirus pandemic, executive leadership is being put to the test. CEOs are facing intense scrutiny for how and when they are reopening their companies. While 2020 might see a freeze in CEO salary, 2019 was a good year for executive pay, as many chief executives were rewarded with huge compensation packages, often worth more than $20 million per year.

24/7 Wall St. reviewed information provided by public business information company MyLogIQ to determine the 50 highest paid CEOs of 2019. CEOs were ranked based on their total compensation, which typically includes salary, bonuses, stock options, and more. Median employee pay by company was also provided by MyLogIQ.

Many corporate leaders have to make difficult choices to help their companies through the pandemic — particularly those in vulnerable industries like oil and gas or entertainment. Many executives in these sectors have furloughed workers, scaled back operations, and reduced their own pay — like GE CEO Lawrence Culp who said he will forgo his salary for the rest of the year. These are the U.S. industries being devastated by the coronavirus.

These Companies Paid Their Boards Over $10 Million

Chief executive officer pay levels have become part of a heated debate about how much public company leaders should be paid. Some packages have risen into the tens of millions of dollars each year. Shareholder groups have tried to block these large pay packages, but almost entirely without success. CEOs at big companies do work hours that some admit can stretch to 60 or more a week. Boards of directors of these companies, on the other hand, attend a handful of meetings a year, often as few as one per quarter. In some cases, the modest work has been rewarded with huge sums of compensation. Several companies paid their boards over $10 million last year. Here is a list of 25 boards of directors with shocking pay packages.

Directors do need to work between meetings to prepare for them. At some companies, mergers and acquisitions activity, financial audits and executive compensation meetings do take up additional hours. Compensation for these usually comes in packages that include both cash and stock awards or options. However, public companies that made $10 million in aggregate compensation to their boards numbered nine last year, according to data from MyLogIQ.

At the top of the list is Tesla. The total compensation of its 10-person board reached nearly $61 million. Note that CEO Elon Musk does not receive money to sit on the board.

Board Members Who Make More Than $1 Million

At a number of major American companies, compensation for board of director members has come under fire from shareholders in recent years. While director salaries remain a small fraction of CEO salaries (these are the highest paid CEOs at America’s largest companies), they have steadily risen over the past decade. In several recent instances, shareholders have even pursued litigation against — what they consider to be — excessive board compensation.

According to data from public company intelligence provider MyLogIQ, the average compensation of nonexecutive board chairpersons at Russell 3000 companies was $330,782 in fiscal 2018. At 18 public companies, the nonexecutive chair of the board made over $1 million.

At a public company, the board of directors is a supervisory body appointed by shareholders to act on their behalf and oversee the activities of management. The chairperson is chosen by the board and is typically responsible for setting the agenda and presiding over meetings. While some companies have combined CEO-chair roles, the majority of large corporations separate the two positions, maintaining certain checks and balances between the branches of corporate governance.