CEO pay soared in 2020, a year of historic business turmoil, a torn job market for many employees and unprecedented challenges for many leaders.
Average pay for the chief executives of more than 300 of the largest U.S. listed companies last year was $ 13.7 million, up from $ 12.8 million for the same companies a year earlier and on track for a record, according to a Wall Street Journal analysis.
Pay continued to rise in 2020 as some companies moved performance targets or adjusted wage structures in response to the Covid-19 pandemic and the associated economic pain. Salary cuts that CEOs took at the height of the crisis had little effect. The stock market recovery boosted what top executives took home as much of their compensation comes in the form of equity.
In some cases, investors have responded by withholding support for companies’ remuneration practices from annual advisory votes, adding pressure on boards of directors. With the annual meeting season just beginning – 80% of the S&P 500 have not yet voted, according to data company Equilar – shareholders have given a thumbs down to pay for schemes at a dozen major companies, including Starbucks Corp. and Walgreens Boots Alliance Inc.
“I don’t think we’ve ever seen anything like it before in terms of the number of changes we’ve seen in incentive plans,” said Shaun Bisman, a salary and corporate governance consultant at Compensation Advisory Partners in New York.