NEW YORK (AP). Even though regular employees get the biggest pay raises in decades, they seem small compared to what CEOs get.
The typical S&P 500 executive compensation package increased 17.1% last year to an average of $14.5 million, according to data analyzed by Equilar for the Associated Press.
The increase was the fastest increase since 2001, surpassing the 4.4 percent increase in wages and benefits received by private sector workers through 2021. For many front-line workers, the increases also did not match inflation. reached 7 percent at the end of last year.
CEO salaries rose as stock prices rose, and earnings soared as the economy emerged from a short-term 2020 recession. As most CEO salaries are associated with this type of performance, salary packages almost fell after years of slow growth.
In many of the most impressive packages, such as the $296.2 million Expedia Group package and the $84.4 million JPMorgan Chase package, the boards of directors have given a particularly large stake or option grant to the newly appointed CEOs who run their businesses. pandemic, or they are the established leaders. He wants to talk to stay.
CEOs often can’t cash out these types of stocks or options for years, and possibly never until the company achieves its goals. But companies still need to disclose their estimates of their value. Only a quarter of the average salary package for all S&P 500 executives last year was real money they could pocket.
Whatever their composition, the salary gap between CEOs and the ordinary workers they oversee continues to widen. Half of the companies surveyed this year would need at least a worker in the middle of the 186-year salary scale to do what their CEOs did last year. That was more than 166 last year.
At Walmart, for example, the company said its average partner received $25,335 in compensation last year. This means that half of the employees earn more and half make less.
That’s up 21 percent from $20,942 last year, with the company’s average hourly wage in the US jumping from $14.50 in January 2021 to over $17 today. This increase is more than the percentage increase received by CEO Doug McMillon. But his 13.7 percent increase earned him a total $25.7 million package.
Anger grows because of this imbalance. Polls show that Americans in political parties view CEO salaries as too high, and some investors object.
Workers are trying to organize unions across the country, and the Big Retirement has encouraged millions of people to quit their jobs to find better jobs elsewhere. The US government counted more than 4 million smokers quit in April 2021 alone, and this is the first time. The monthly number has already exceeded 4.5 million twice.
“This kind of employee transfer will be a significant amount in the company’s revenue,” said Sarah Anderson, director of the global economy project at the Institute for Progressive Policy Studies.
“They need to think about what message they’re sending these people, whether they really value their work,” Anderson said. “When a man in a corner office does it a few hundred times, if not a thousand times, it sends a really debilitating message.”
CEO salary growth has slowed in recent years, with average growth rising from 8.5 percent in 2017 to 4.1 percent in 2019. It rose again to 5 percent in 2020, a difficult year since the pandemic stifled the economy. companies fell.
In 2020, many companies changed the complex formulas they created to determine the salaries of their CEOs. The regulations offset losses caused by the pandemic, which many boards consider to be an extraordinary event beyond the CEO’s control.
Then came 2021. Stock prices soared, driven by the reopening economy, very low Federal Reserve interest rates, and other factors, and the S&P 500 jumped nearly 27 percent, setting a record for years. Revenues per share increased nearly 50 percent.
Dan Laddin, partner at Compensation Advisory Partners, a consulting firm that works on boards of directors, says CEOs have had to deal with confusing supply chains and shortages of chips and other vital materials that have impacted businesses across industries throughout the year.
“All this leads to a desire to truly reward managers,” said Kelly Malafis, who is also a partner at Compensation Advisory Partners, “because the finances are there and there is a perception that the management teams are unique. They specialize in situational management and delivering results.”
According to data analyzed by Equilar, the 17.1% increase in the average salary of S&P 500 executives last year was the biggest increase since compensation packages increased 23.9% in 2010.
Take Murray Barr, CEO of General Motors, for example. Its industry was particularly affected by the shortage of computer chips, which halted vehicle production.
Despite this, GM’s board emphasized that the company is still posting record earnings before interest, taxes and other items. The automaker has also stepped up the development of its electric vehicles. These were two factors that impacted Barra’s salary, and his compensation rose 25.4 percent to $29.1 million.
“A record-breaking company realizes that workers are profitable,” said Dave Green, hot metal machinist at GM’s Bedford, Indiana plant. “We’re just trying to get through.”
He specifically talked about temporary workers who earn around $16 an hour, have to work for years before they can go full-time, and also don’t have many weekend opportunities.
“People who are new to the job whose kids won’t have the opportunities my kids have,” said Green, who has two daughters and started working as a summer assistant at GM in 1989.
Closer to the top of the CEO pay rankings last year was Jamie Dimon of JPMorgan Chase, whose $84.4 million compensation package was ranked fifth in the AP poll. That’s an increase of 166.7 percent from last year, and most of that amount came from $52.6 million in stock options.
The board said it allowed options because of Dimon’s desire to continue running the company for many more years, and because it’s “a unique milestone at Bay.” dimon He also stated that the options are not part of his regular annual payment and must wait at least five years to start using them.
However, only 31 percent of investors at JPMorgan Chase’s annual shareholder meeting recently rated Dimon’s rewards package positively. However, the vote is advisory only and does not force the company to make changes.
Last year, an average of 92.6 percent of shareholders approved of what the AP poll called “Negotiate pay.” This is slightly lower than 93.4 percent last year.
The AP and Equilar compensation study included payroll data for 340 S&P 500 CEOs with at least two years of financial histories at their companies who filed formal statements between January 1 and April 30. Some high-ranking CEOs were not included because they were not qualified, like Amazon’s Andy Jassi and Twitter’s Parag Agrawal. The study did not include changes in the amount of CEO retirement benefits and some other items in salary totals.
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AP Business reporters Matt Ott, Tom Krisher, Anne D’Innocenzio, Michael Liedtke, and Ken Sweet contributed.
Source: Breitbart
