Tag: CEOs

CEOs, Boards Forgo Cash Retainers in Liquidity Squeeze

Companies are taking steps to shore up balance sheets with more cash on hand by drawing on credit facilities, suspending dividends, cutting spending and in some cases eliminating cash payments to CEOs, executives and board members as employees deal with business shutdowns.

At such companies as Boeing, Booking Holdings, Darden Restaurants, Delta Air Lines, Kama Corp., United Airlines Holdings, Sabre Corp. and Steelcase, executives and some board members have decided to cut base salaries and board cash retainers, and in some cases executives will go unpaid until the end of the year. The compensation cuts provide relatively small amounts of liquidity for companies and are likely intended to send a message to employees who are unpaid and uncertain.

Coronavirus Caps Years of Rich Pay for Many CEOs

Chief executives of large U.S. companies rode a more than decadelong bull market to a string of record pay days.

Now, the stock market’s coronavirus-fueled swoon could wipe out hundreds of millions of dollars from executive pay packages and prompt a recalibration of how CEO compensation is set.

The potential losses highlight the flip side of stock-based compensation, experts say. The rout, which has destroyed trillions of dollars in market value for millions of retirees and investors, also is taking a chunk out of the equity awards that lifted many CEOs’ pay to all-time highs in recent years.

For 143 CEOs of S&P 500 companies, the median compensation in 2019 was $13 million, up from $11.2 million for the same group in 2018 and on pace to set a record if the pattern holds for the 2019 data, according to a Wall Street Journal analysis.

The Journal analysis uses total compensation, including salary, bonus and stock awards as they are valued in securities filings and provided by MyLogIQ, a research and data firm.

Bank of America Keeps CEO’s Pay at $26.5 Million

Bank of America Corp. greenlighted a $26.5 million pay package for its top executive in 2019 after the bank’s shares marked their best run in years.

Brian Moynihan is set to receive compensation that matches the preceding year’s package. His pay includes a $1.5 million base salary and $25 million worth of restricted stock, the bank said in a regulatory filing Friday.

His 2019 earnings put him slightly below other Wall Street chiefs like JPMorgan Chase & Co.’s James Dimon, who made $31.5 million, and Morgan Stanley’s James Gorman, who made $27 million.

In 2018, Mr. Moynihan was the 10th highest-paid among the 75 CEOs in the S&P 500 financial sector, according to a Wall Street Journal analysis of pay data from MyLogIQ LLC.

Interim CEOs: How the Top Temp’s Pay is Set

When a CEO exits unexpectedly, the vacancy leaves room for someone to step up and prove his or her worth to the company.

Their worth, as it turns out, is about $1.6 million, on average, for an “interim CEO-ship” among those in the Russell 3000, according to public company intelligence provider MyLogIQ.

There have been 140 interim CEOs named over the past six years, and many of them were paid handsomely to step into their temporary roles, with median pay at just under $1 million — although the total comp was far lower than the $4.8 million median pay that permanent CEOs make annually in the Russell 3000.

As with pay trends for permanent CEOs, there are a number of factors that comp committees consider when determining comp for the interim CEO.

Viacom and CBS Executives to Earn Big Bucks in Merger Deal

The merger of Viacom Inc. and CBS Corp. will be lucrative for the top executives of both companies.

Viacom Chief Executive Bob Bakish, who will become president and CEO of the combined company, ViacomCBS, has signed a new contract ending four years after the deal closes. The contract lists salary, bonuses and other incentives worth about $31 million a year, roughly 55% higher than Mr. Bakish’s total compensation in the most recent fiscal year, the company said in a securities filing.

Acting CBS Chief Executive Joe Ianniello, who will be chairman and CEO of CBS at ViacomCBS reporting to Mr. Bakish, will receive a payout of about $70 million when the deal closes. That payment resulted from a provision in his old contract at CBS that entitled him to a lump sum if he wasn’t named CEO of the combined company in the event of a merger.

Will Upswing in One-Time Stock Awards Crumble?

One-time stock awards for CEOs in fiscal year 2018 are up, compared to the previous two years.

According to data from analytics firm MyLogIQ, in 2018, the largest one-time stock awards in the S&P 500 went to Oracle’s co-CEOs Safra Catz and Mark Hurd, each of whom received special awards of nearly $104 million — almost seven times the next-largest special award of $15.5 million.

Compensation experts aren’t sure these blockbuster special awards are part of a trend with a lot of legs, though. Judging by the voter support levels, many shareholders were irked by the amounts for the one-time stock awards. Several of the companies that awarded large amounts received low shareholder support for say-on pay.

Wall Street Chiefs’ Pay Doesn’t Sync With Returns

Wall Street companies delivered significant losses to their shareholders last year, but the pain didn’t spread to the top.

The chiefs of banking and financial institutions in the S&P 500 received a median raise of 8.5% last year, compared with 5.6% for CEOs in the broader index, according to a Wall Street Journal analysis.

Meanwhile, firms in the sector posted a median total shareholder return—or stock-price changes plus dividends—of negative 17% in 2018, while the median return for the index as a whole was negative 5.8%.

Median pay for finance CEOs was $11.4 million for the year, $1 million below the overall S&P 500 median. The Journal analysis uses total compensation as specified by Securities and Exchange Commission regulations, which includes salary, annual bonuses, and long-term equity and cash incentives. It also includes perquisites and the value of pension gains and some increases in deferred compensation accounts.

This Executive Made $108 Million and Is Not a CEO

CEO pay has become a bone of contention between the boards of some public companies and their shareholders. How can a CEO be worth tens of millions of dollars, some investors ask, no matter how good earnings are? Boards argue that the best CEOs are in short supply, and need to be paid sums that will keep them in place, and motivated. Several companies pay executives who are not CEOs extravagant compensation. In these cases,  questions about pay become even more in question.

Some of the non-CEOs who make massive sums are founders or the relatives of founders. For several people at the top of non-CEO large pay packages, this is the case. The top paid non-CEO executive at a public company last year was Larry Ellison, who made $108 million for 2018, according to new data from MyLogIQ, which analyses public company information. Ellison is the executive chairman and chief technology officer of Oracle Corporation, which he founded in 1977. He stepped down as CEO in 2014. He is currently the seventh wealthiest person in the U.S., with a net worth of $71 billion, according to Forbes. Ellison never graduated from college but has built a company with revenue of $40 billion last year. He is also among the world’s premier yachtsmen. A team he financed won the America’s Cup in 2013.