Share prices down, salaries up. What's going on?
A new study released by research firm Equilar has found that the median pay for the top 100 CEOs at US public companies with revenue of $1 billion or more rose to a record $22.3 million in 2022, marking a 7.7% increase from the previous year.
This is despite a negative 18% total return of the S&P 500 and negative 11% total return for the companies studied. The pay gains were driven mainly by stock awards, which have become a centerpiece of executive compensation but not as much for employees.
The median value of CEO stock awards rose 20% to $13.8 million in 2022. Equilar director of research, Courtney Yu, said much of that was awarded at the start of last year, as companies looked to keep their top leaders in place. "You want stability of leadership to guide you through tough times," Yu said. He added that amid the macroeconomic uncertainty, "There's still a little more of this incentivizing of executives that's leading to the increases in CEO pay."
Some of the CEOs receiving the biggest pay increases in 2022 were the CEOs of Jefferies Financial Group and Prologis Inc. Jefferies CEO Richard Handler received $56.9 million, almost double his total compensation in 2021. Much of the pay, $25 million, reflected a one-time "leadership continuity grant" of restricted stock. At the company's March 29 shareholder meeting, 59%, of votes cast backed the pay. Meanwhile, the CEO of logistics real estate company Prologis, Hamid Moghadam, saw his total compensation rise by 93% to $48.2 million, driven mainly by stock awards.
2022’s biggest CEO pay packets
- David Zaslav—Warner Bros. Discovery, $246 million
- Fabrizio Freda—Estée Lauder, $66 million
- Jay Snowden—Penn National Gaming, $65.9 million
- Patrick Gelsinger—Intel, $178.6 million
- Glenn Fogel—Booking Holdings, $54 million
- William McDermott—ServiceNow, $165.8 million
- Robert Goldstein—Las Vegas Sands, $31.2 million
- James Dimon—JPMorgan Chase & Co., $84.4 million
- Andy Jassy—Amazon, $212.7 million
- Tim Cook—Apple, $98.7 million
The CEOs' higher gains pushed the median "pay ratio" at companies led by the CEOs studied by Equilar to 288 times the pay of their median employee, up from 254 times in 2021. This means that the pay among the CEOs rose faster than it did for US workers in 2022, despite tight labor markets. The average weekly earnings for US private sector employees was $1,132 in December 2022, up 3.6% from a year earlier, according to the US Bureau of Labor Statistics.