The salaries of billionaires that CEOs earn, even in companies affected by the coronavirus pandemic

Boeing has had a historically bad year 2020. Its 737 Max has been inactive for most of the year after two fatal crashes, the pandemic decimated its business and the company announced plans to lay off 30,000 workers and reported a loss of $ 12 billion. However, its CEO, David Calhoun, he was rewarded with compensation of approximately $ 21.1 million.

Norwegian cruise Line barely survived the year. With the cruise industry crippled, the company lost $ 4 billion and licensed 20% of its staff. This did not stop Norwegian from doubling the salary of Frank Del Rio, its CEO, to $ 36.4 million.

And in Hilton, where nearly a quarter of the company’s employees were made redundant because hotels around the world were empty and the company lost $ 720 millionIt was a good year for the manager. Hilton reported in a securities filing that Chris Nassetta, its chief executive, received compensation of $ 55.9 million in 2020.

The coronavirus has plunged the world into economic crisis, skyrocketed America’s unemployment rate, and left millions of Americans scrambling to make ends meet. However, in many of the companies hardest hit by the pandemic, the executives in charge were showered with profits.

The divergent fortunes of CEOs and everyday workers illustrate the stark divisions in a country on the brink of an economic boom, but still plagued by steep income inequality. Stock markets rose and the rich spend freelyBut millions of people still face significant challenges. Executives are making their fortunes as laid-off workers line up at food banks.

“Many of these CEOs have improved their profitability by laying off workersSaid Senator Elizabeth Warren, Democrat of Massachusetts, who proposed new taxes for the ultra-rich. A small handful of people who have reached the top of the fat pole receive all the rewards, while everyone else is left behind.

For executives with large stakes in giant companies, the gains have been even more pronounced. Eight of the 10 richest people in the world These are the men who have founded or run tech companies in the United States, and each has earned billions of dollars in wealth this year, according to Bloomberg.

Amazon founder Jeff Bezos, whose profits have skyrocketed with people trapped in their home, is now worth $ 193 billion. Larry Page, co-founder of Google, is worth $ 103 billion, an increase of $ 21 billion in the past four months alone. as your business fortunes have improved during the pandemic.

And, according to security documents, a privileged few are rapidly accumulating new fortunes. Chad Richison, founder and CEO of Oklahoma software company Paycom, is worth more than $ 3 billion and received $ 211 million last year, when his company made a profit of $ 144 million . John Legere, former CEO of T-Mobile, received $ 137.2 million last year, a reward for taking over his rival Sprint.

“We created this class of billionaires and billionaires who they have not been good for this country “. said Nell Minow, vice president of ValueEdge Advisors, an investment advisory firm. “They can build a wing in a museum. But it’s not the infrastructure, it’s not the middle class ”.

The gap between executive pay and the average wage of workers has been widening for decades. CEOs of large companies now earn, on average, 320 times more than your typical worker, according to the Institute for Economic Policy. In 1989, this ratio was 61-1. From 1978 to 2019, pay increased by 14% for typical workers. It increased by 1,167% for CEOs.

The pandemic has only exacerbated these disparities, as hundreds of companies have rewarded their executives with pay packages well worth more than most Americans will earn in their lifetimes.

More profit

AT&T, the media conglomerate, lost $ 5.4 billion and cut thousands of jobs during the year. John Stankey, the CEO, received $ 21 million for his work in 2020, against $ 22.5 million in 2019.

T-Mobile has said it will create new jobs through its merger with Sprint, but it has already started the layoffs. It earned $ 3.1 billion in 2020. In addition to Legere’s windfall, the company awarded current CEO Mike Sievert, 54.9 million.

Tenet Healthcare, a chain of hospitals, laid off around 11,000 workers during the pandemic, but nearly 399 million in profits. “The past 12 months have clearly been an amazing challenge and learning experience,” wrote the CEO of the company, Ronald Rittenmeyer, in a filing with the Securities and Exchange Commission. In the same document, Tenet revealed that Rittenmeyer made $ 16.7 million last year.

YL Brands, owner of Victoria’s Secret, has cut office staff by 15% and temporarily closed most stores during the pandemic. Andrew Meslow, who replaced Leslie H. Wexner as CEO in February last year, was still making $ 18.5 million.

“They always say their employees are their most important assets,” Minow said. “But they sure don’t treat them that way.”

Dozens of state-owned companies have already said they have paid their CEOs $ 25 million or more last yearaccording to Equilar, an executive compensation consultancy. Several companies that announced major layoffs last year, including Comcast and Nike, have yet to release executive compensation data from last year.

Many companies have defended their executive compensation plans. In some cases, CEOs took less than they were entitled to. Most senior executives receive the bulk of their salary in stocks, the value of which can decline and often consolidate over several years. And in many companies, the share price has risen despite the economic turmoil and regardless of if the business was profitable.

“At the end of the day, CEOs end up being rewarded for the way they react to these external events.” said Jannice Koors, a compensation consultant at Pearl Meyer who works with companies to determine executive compensation. “If you think of store closures, permits, etc., CEOs are rewarded for making these decisions“.

In many ways, the role of business leaders has never been more pronounced. Beyond running their businesses, CEOs have become prominent voices in national conversations about race, climate change and the franchise.

reviews

At the same time, face criticism from all sides. Sen. Mitch McConnell of R-Kentucky recently told companies protesting Republican efforts to reform election laws to “stay out of politics.” Meanwhile, union activists are calling on companies to take better care of their workers.

“It is time for businesses in this country to play their part in a recovery that can be shared by all,” he said. said Mary Kay Henry, International President of the International Union of Service Employees. “We cannot reinforce the economic inequalities that existed before the pandemic.”

Executives of publicly traded companies receive the bulk of their compensation in shares, a transaction designed to align payment with a company’s stock price performance. When the share price rises, according to theory, investors and managers share the profits.

Defying all logic, the stock market has been skyrocketing for months, more than making up for the losses suffered at the start of the pandemic. As a result, many CEOs ended the first year of the pandemic after having, unlikely, overseen a rise in their company’s stock price. Market resistance and the feeling that COVID-19 was an act of God, not one person’s fault, he helped companies justify big compensation packages.

“Boards thought, ‘This is not the fault of our management team. It is not the result of poor planning or lax governance. It happened to everyone ”. Koors said. “There was a feeling in the boardrooms that if, despite all of this, they managed to hit the numbers, who are we to reduce those payments in a year when everyone is working hard?”

The biggest pay dispute this year concerns General Electric, a company still reeling from years of mismanagement. Larry Culp, the CEO, received $ 73.2 million last year and was able to raise over $ 100 million more thanks to a recently updated payment plan. Several large corporate governance groups have opposed Culp’s compensation, and investors will vote on the issue at GE’s annual meeting next month.

Even when executive pay was reduced, it often remained high. Robert A. Iger, president of Walt Disney Co., did less than half of what he did in 2019 last year, but his pay was still $ 21 million. The pay cut was a reflection of his transition from CEO to CEO, and the tough year at Disney, which laid off more than 28,000 people due to the closure of its theme parks.

At Boeing, Calhoun voluntarily gave up most of his cash salary this year, taking just 269,231 of the 1.4 million he was entitled to. However, thanks to the share awards, his compensation was over $ 21 million.

A spokesperson for Hilton said the figure of $ 55.9 million in the company’s annual filing did not reflect Nassetta’s actual salary. Due to the pandemic, Hilton restructured several complex stock awards. As a result, Nassetta’s actual profit for 2020 will be closer to $ 20.1 million, a slight decrease from 2019.

The New York Times