As You Sow this week launched its ninth annual examine — “The 100 Most Overpaid CEOs: Are Fund Managers Asleep on the Wheel?” — which focuses on how pension and monetary fund managers maintain corporations accountable for extreme compensation. Apple CEO Tim Cook dinner is listed among the many most overpaid CEOs.
Whole pay for S&P 500 chief executives continues to extend
The common pay of the “100 Most Overpaid CEOs” for this report was $38,192,249, up 30.6% from final yr’s common of $29,233,020. The median pay — much less influenced by the huge inventory awards that inflate pay on the very prime — was $23,455,188, representing a rise of 8% over the prior yr.
The hole between CEO and median employee pay has additionally elevated
In keeping with the AFL-CIO, the chief executives of S&P 500 corporations acquired 324 instances that of their median-paid staff on common, up from 299 instances in 2020 and 264 instances in 2019. At Amazon, the CEO-to-worker pay ratio reached 6,474 to 1, with CEO Andrew Jassy making $212.7 million in complete compensation whereas the median employee acquired $32,855.
Shareholder opposition to pay packages continues to develop
Within the S&P 500, shareholder votes in opposition to CEO pay continued its five-year upward trajectory to a excessive of 12.6% opposition, gaining 4.2 proportion factors in votes in opposition to since 2017. As detailed on this report, extra funds are voting in opposition to extra pay packages. If it weren’t for the continued weak response from a handful of the large gamers, the message that shareholders are fed up can be clearer.
Firms with overpaid CEOs proceed to underperform
Firms with the ten most overpaid CEOs (as named in our earlier experiences) as soon as once more noticed shareholder returns a lot worse than the S&P 500 index.
MacDailyNews Take: In January, after shareholder pushback, Apple CEO Tim Cook dinner took a 50% pay minimize from $99.4 million in 2022 and $98.8 million in 2021 to about $49 million.
“Sure, government compensation is out of whack. Tim Cook dinner is vastly overpaid for what he does. It is because he holds a uncommon skillset and it advantages the shareholders to have continuity within the CEO place. Mainly, Apple overpays Tim Cook dinner with the intention to have a long-term CEO which supplies confidence to the market. A succession of various CEOs leaping from firm to firm each different yr searching for greater salaries can be a damaging and justifies Cook dinner’s overpayment. Cook dinner is paid to remain greater than for what he really does. For this reason he has vesting targets set years into the long run. If he stays, offering continuity, he advantages and so does the corporate’s inventory value.” — MacDailyNews, February 18, 2022
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