Tag: CEOs

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

The U.S. Securities and Exchange Commission (SEC) 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 (AI) and machine learning to examine SEC data. His 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 CEO Made 2,900 Times More Than His Employees

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, which is 2,963 more than the median compensation of his workers. According to the SEC, “The median employee’s annual total compensation was $71,259 in 2020” at the company he runs. He was also 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.

Meet the Highest Paid CEO in S&P 500, Paycom’s $211M Man

Move over, Elon Musk and Tim Cook. There is a new name breaking into the list of the highest-paid chief executives: Chad Richison, the founder and CEO of payroll processor Paycom Software Inc.

The Oklahoma City billionaire last year was awarded compensation valued at $211 million by Paycom, the company disclosed in the annual proxy statement it filed with the Securities and Exchange Commission last week.

Mr. Richison’s 2020 compensation was worth closer to $702 million, based on the value of the shares underlying the equity awards, according to an independent calculation by ISS ESG, an arm of proxy advisory firm Institutional Shareholder Services.

…His 2020 compensation package makes Mr. Richison the highest paid CEO in the S&P 500 based on disclosures so far, according to research firm MyLogIQ. It is one of the five biggest CEO awards since at least 2010, according to MyLogIQ data.

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.”

CEO Pay Seesaws Under Pandemic Pressure

…Meanwhile, say-on-pay support has declined somewhat in the first three months of this year so far compared to 2020. According to data from compensation consulting firm Farient Advisors’ say-on-pay tracker and public company intelligence provider MyLogIQ, average say-on-pay support at S&P 500 annual meetings reported through March 23 was 84.6%. Last year through March 23, say-on-pay support for the S&P 500 was 89.3%. Only two S&P 500 companies, The Walt Disney Company and Qualcomm, had received less than 80% support by this time in 2020. By contrast, this year five companies — AmerisourceBergen; Beckton, Dickinson and Company; Disney; D.R. Horton; and Hologic — received less than 80% support on meeting results reported by March 23.

Peek says companies’ proxy disclosures this year are going to be critical, particularly for companies in the group strongly affected by the COVID-19 pandemic that may have used upward discretion on incentives.

“There are companies out there that made discretionary adjustments that went above target and in their proxies. They talk about the things they had to put on hold and the things they did for their communities, and that helps tell the story,” she says.

U.S. Companies Revamp Bonus Plans as Pandemic Upends Forecasts

Companies are revising their plans for bonuses and other incentive compensation as the coronavirus pandemic upended financial forecasts and executives managed through a once-in-a-lifetime economic downturn.

The pandemic has had a disparate effect on companies’ balance sheets, leading to soaring profits in some industries, such as online retail and groceries, and steep losses in others, for example hospitality and travel.

Over a quarter of large U.S. businesses initially reduced executive salaries in the spring, according to Equilar Inc., a data provider. The cuts, at companies including Walt Disney Co. , General Motors Co. and United Airlines Holdings Inc., marked a reversal following several years of wage increases in the C-suite. But they were temporary, as many companies restored manager salaries in recent months.

Now, as companies are getting ready to pay out bonuses and other rewards for the past year, boards are contemplating whether it makes sense to assess executives based on goals and targets that were put in place in late 2019 and early 2020, when the outlook for their business was very different.

…Short-term incentives for senior executives at companies in the S&P 500 were mostly on the rise before the pandemic, according to data provider MyLogIQ.

Why Are There Still So Few Black CEOs?

If corporate life is a pyramid, for Black Americans, it is one with the steepest of peaks.

Out of the chief executives running America’s top 500 companies, just 1%, or four, are Black. The numbers aren’t much better on the rungs of the ladder leading to that role. Among all U.S. companies with 100 or more employees, Black people hold just 3% of executive or senior-level roles, according to Equal Employment Opportunity Commission data.

Decades after the civil-rights movement led to laws banning workplace discrimination, progress for Black executives has hit a ceiling.

“Opportunity is not equally distributed,” says Ron Williams, the Black former CEO of Aetna who has served on 14 boards over his career and currently sits on the boards of Boeing Co. and American Express Co. Too many promotions in companies are informally decided before jobs are ever posted, leaving Black people and more marginalized talent without the chance to compete, he says. “People don’t get the chance to work their way into a position where they are a reasonable candidate for a role,” he says.

…The ranks of Black chief executives have stayed low even as other ethnic minorities have seen greater, albeit still limited, advancement. Among CEOs of S&P 500 companies, 11% are ethnic minorities. Of the total, 3% are Latino, 3% are Indian, 2% are Asian, 1% are Middle Eastern and 1% are multiracial. Just 1% are Black, according to an analysis by MyLogIQ, a data tracker. Black people make up about 13% of the U.S. population.