Tag: Compensation

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.

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

The 50-year-old executive started the software company in 1998 and has run it since. He is Paycom’s largest shareholder, with a stake worth $3.2 billion. A surge in the stock price landed Mr. Richison on the billionaires list kept by Forbes magazine. Late last year, he signed the Giving Pledge created by Bill Gates and Warren Buffett, publicly promising to give away at least half his wealth.

…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 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.

Corporate Jet Use Taxis for Takeoff in Pandemic

…Who gets to use the jet in a fractional arrangement varies by company, according to filings gathered by public company intelligence provider MyLogIQ. For example, at Sysco, jet use is made available to directors, named executive officers “and other members of management” for business purposes. At DTE Energy, executives and “other employees” are permitted to use the… Continue reading Corporate Jet Use Taxis for Takeoff in Pandemic

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.

Perk Problems Ensnare Another Company as SEC Clarifies Covid-19 Impact

This week the SEC announced charges against Hilton Worldwide Holdings for failing to disclose approximately $1.7 million worth of perquisites related to personal use of the company’s corporate jet and executive hotel stays. The commission says the hotelier “failed to appropriately apply the SEC’s compensation disclosure rules to its system for identifying, tracking and calculating perquisites.”

This enforcement action and a recently released compliance and disclosure interpretation (CD&I) outlining some pertinent perquisite issues that may come up during the Covid-19 pandemic are signals that the commission is focusing on perk identification and disclosure, sources say. Governance experts suggest that compensation committees take a closer look at perquisite disclosures, particularly surrounding jet use in light of these enforcement actions and travel impacts stemming from the pandemic.

…According to disclosures made in 2020 and analyzed by public company intelligence provider MyLogIQ, only 26 companies specifically disclosed aircraft travel in perquisite calculations.

When Is the Right Time to Switch Comp Consultants?

There are several reasons for boards to move on from a compensation consulting firm, and as the mandate facing comp committees increases in magnitude and scope, some comp consultants may not be the right fit any longer.

According to data from public company intelligence provider MyLogIQ, 299 Russell 3000 companies switched comp consulting firms between 2019 and 2020, with 34 companies switching to Pearl Meyer and another 33 hiring Meridian Compensation. Other firms that were newly hired by companies include Radford Aon, Pay Governance and Compensia. Currently, Frederic W. Cook & Co. (F.W. Cook) has the largest portion of Russell 3000 clients as of July 7, advising 15% of companies in the index, according to MyLogIQ data. Pearl Meyer is the comp consulting firm for 11% of the Russell 3000 while Meridian Compensation advises 11%.

Typically, contemplating a change in comp firms comes when there is a board refreshment and new committee members or a new chair or when the principal consultant for the company leaves the consulting firm, sources say. Nora Denzel, chair of the compensation and leadership resources committee at Advanced Micro Devices and compensation committee member at NortonLifeLock, writes in an e-mail that some boards have guidelines to rotate their compensation committees to get a “fresh set of eyes and another perspective on things,” which may drive a consultant change.