Tag: Compensation

Hard Pass From Boards on Pay Increases

As the time of year approaches when many board committees conduct reviews of director compensation, boards are pressing pause on annual increases to cash and equity retainers, and only making small surgical changes to compensation programs if it appears necessary due to leadership transitions.

George Paulin, chairman and CEO of Frederic W. Cook & Co., says he’s conducted at least 10 board compensation reviews for companies in the Fortune 200 in roughly the past month, and generally, “boards are very hesitant to increase their pay.”

“My prognostication on this is that pay will be flat,” says Paulin. “I don’t think there’s going to be much of a year-over-year increase.”

Even in regular times, directors don’t want to be criticized for increasing their pay when company performance has lagged, or in years in which executives don’t get raises or have failed to reach bonus targets. In response, many boards have adopted language in committee charters mandating that the committee tasked with overseeing board compensation conduct an annual review of pay with an independent consultant.

Pandemic Prompts Review of Jet Travel

While many executives continue to work from home, data shows that travel by corporate aircraft and chartered and fractionally owned jet fleets has begun to take off in recent weeks. That trend is likely to continue through 2020 as companies seek to reduce the risk of CEOs’ being exposed to the coronavirus. Accordingly, sources say boards should take a renewed look at corporate aircraft and private jet travel policies.

Meanwhile, the SEC has spent the past several years pursuing enforcement actions stemming from the improper disclosure of executives’ personal use of corporate aircraft, as Agenda has reported, creating a dynamic governance issue that is ripe for scrutiny.

“There has been a lot of pressure in recent years to keep [aircraft perquisite] figures down, so this is a perk that over the years has been in decline, along with country clubs and other things,” says Alan Johnson, CEO of compensation consulting firm Johnson Associates. “But I think the long-lasting implications of the pandemic are going to change everything. There’s business use of the planes, which is going to accelerate dramatically because there are fewer commercial flights … this is a different world.”

CFO Pay Rises as Responsibilities Expand

CFOs saw an increase in pay last year as responsibilities for non-financial issues, including operations and strategy, expanded, sources say. Moreover, the Covid-19 pandemic is driving a redoubled focus on operations and emergency planning from CFOs, and some companies are bringing in battle-hardened finance veterans to tackle the issues related to the crisis.

However, it remains unclear how 2020 will unfold in terms of compensation for CFOs, who are shouldering much of the workload in managing liquidity and capital allocation. Annual bonuses will likely decrease more dramatically in the future as the 2020 pandemic roils company financials, sources say.

“We expect a lot of companies are probably going to have lower bonuses again next year on the equity side; however, we will have to wait and see because most companies granted equity before the pandemic impact really started for calendar-year companies,” says Roman Beleuta, principal at Compensation Advisory Partners.

Coronavirus Crisis Dents Salaries, Not Stock Awards, for Many CEOs

Hundreds of U.S. companies reduced salaries for their chief executives as the coronavirus pandemic swept across American business, a reversal for a group of leaders that until this year has ridden a bull market to record compensation.

Big-company CEOs had their richest paydays ever in 2019, a Wall Street Journal analysis shows. But in March and April many took large cuts to their salaries after the deadly virus crippled global commerce. For 2020, few so far changed the equity awards that make up the bulk of executive compensation and the value of which is tied to the stock market.

Unlike prior years, now “the question is not how much of an increase are we giving over the normal salary; it’s when do we even restore the old salaries,” said Robin Ferracone, CEO of compensation consulting firm Farient Advisors LLC.

One reason corporate boards have been slow to make bigger compensation changes: uncertainty over how long the economic slowdown will last, what its ultimate repercussions will be and how investors will react. After plunging, the stock market has rebounded from its March lows.

Alphabet, Fox and Netflix CEOs Were Among the 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.

CEO Salaries: These Were the 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.

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.

Coronavirus Crimps Some CEO Salaries but Not All

Cheesecake Factory Inc. furloughed about 41,000 hourly restaurant workers to conserve cash in the coronavirus pandemic. It also cut pay for other employees by as much 20%—a reduction that Chief Executive David Overton matched for his $995,000 salary.

At Yum Brands Inc., Chief Executive David Gibbs is forgoing his $1.2 million salary for the rest of this year, using the money in part to pay one-time $1,000 bonuses to managers of company-owned restaurants in its KFC, Pizza Hut, Taco Bell and The Habit Burger Grill chains.

As corporate America reels from the pandemic, senior executives are taking markedly different approaches to sharing the economic pain suffered by employees, a review by The Wall Street Journal found.

Chief executives at 184 companies within the S&P Composite 1500, comprising the biggest public corporations, have announced temporary reductions in their salaries, ranging from 10% to 100%, with a median cut of 50%, according to the Journal’s analysis of data from research firm MyLogIQ and securities filings. Of the 106 companies that have reported furloughing employees, 17 haven’t announced CEO salary reductions, the analysis found.