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Time of India
4 days ago
- Business
- Time of India
S&P 500 CEO pay up 10% as stock prices and profits soar
New York: The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 10% in 2024 as the stock market enjoyed another banner year and corporate profits rose sharply. Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can't cash in for years, if at all, unless the company meets certain targets, typically a higher stock price or market value or improved operating profits. The Associated Press' CEO compensation survey, which uses data analysed for The AP by Equilar, included pay data for 344 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between January 1 and April 30. Here are the key takeaways from the survey: A Good Year Live Events The median pay package for CEOs rose to $17.1 million, up 9.7%. Meanwhile, the median employee at companies in the survey earned $85,419, reflecting a 1.7% increase year over year. CEOs had to navigate sticky inflation and relatively high interest rates last year, as well as declining consumer confidence. But the economy also provided some tail winds: Consumers kept spending despite their misgivings about the economy; inflation did subside somewhat; the Fed lowered interest rates; and the job market stayed strong. The stock market's main benchmark, the S&P 500, rose more than 23% last year. Profits for companies in the index rose more than 9%. "2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions," said Dan Laddin, a partner at Compensation Advisory Partners. Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies, said there have been some recent "long-overdue" increases in worker pay, especially for those at the bottom of the wage scale. But she said too many workers in the world's richest countries still struggle to pay their bills. Top earners Rick Smith, founder and CEO of Axon Enterprises, topped the survey with a pay package valued at $164.5 million. Axon, which makes Taser stun guns and body cameras, saw revenue grow more than 30% for three straight years and posted record annual net income of $377 million in 2024. Axon's shares more than doubled last year after rising more than 50% in 2023. Other top earners in the survey include Lawrence Culp, CEO of what is now GE Aerospac e ($87.4 million), Tim Cook at Apple ($74.6 million), David Gitlin at Carrier Global ($65.6 million) and Ted Sarandos at Netflix ($61.9 million). The bulk of those pay packages consisted of stock or options awards. The median stock award rose almost 15% last year compared to a 4% increase in base salaries, according to Equilar. "For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses," said Melissa Burek, also a partner at Compensation Advisory Partners. "Given the significant role that long-term incentives play in executive pay, this trend makes sense."
Time of India
4 days ago
- Business
- Time of India
CEO pay climbs nearly 10% in 2024, far outpacing worker wage growth
Photo- AP Compensation for CEOs at S&P 500 companies jumped nearly 10% in 2024, as stock prices surged and corporate profits swelled, continuing a trend of widening pay gaps between executives and average employees. According to data analyzed for The Associated Press by Equilar, the typical pay package for S&P 500 CEOs who served at least two full consecutive fiscal years rose to $17.1 million, up 9.7% from the previous year. In contrast, the median employee at companies in the survey earned $85,419 — a 1.7% increase year over year, AP reported. The AP's annual survey includes data from 344 executives who filed proxy statements between January 1 and April 30. Despite economic concerns such as lingering inflation and elevated interest rates, the stock market soared in 2024. The S&P 500 gained more than 23%, while corporate profits rose over 9%, driving up performance-based compensation. Many companies have shifted CEO pay toward stock-based awards, which are often conditional on future targets like share price increases or improved profitability. '2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions,' said Dan Laddin, a partner at Compensation Advisory Partners. Top-earning CEOs Rick Smith, CEO of Axon Enterprises, led the list with a $164.5 million pay package. Nearly all of it consisted of stock awards tied to future performance through 2030. Axon, the maker of Tasers and body cameras, posted a record $377 million in net income and saw its shares more than double last year. Other high earners included: Lawrence Culp, GE Aerospace – $87.4 million Tim Cook, Apple – $74.6 million David Gitlin, Carrier Global – $65.6 million Ted Sarandos, Netflix – $61.9 million Most of these packages were heavily weighted toward stock and options. According to Equilar, the median value of stock awards climbed nearly 15%, while base salaries grew by only 4%. 'For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses," said Melissa Burek, another partner at Compensation Advisory Partners. "Given the significant role that long-term incentives play in executive pay, this trend makes sense.' Jackie Cook of Morningstar Sustainalytics noted that linking CEO pay to stock performance may reflect shareholder priorities but warned it has 'led to a 'phenomenal rise' in CEO compensation 'tracking recent years' market performance,' which has 'widened the pay gap within workplaces.'' Notable omissions and exceptions Some well-known CEOs were excluded from the rankings due to the survey's eligibility criteria. For instance, Starbucks' Brian Niccol, whose 2024 compensation was valued at $95.8 million, only became CEO in September. Nvidia CEO Jensen Huang's $49.9 million package was not included as the company filed its proxy after the survey's deadline. Warren Buffett, known for his modest salary, was listed at $405,000—about five times the median worker's pay at Berkshire Hathaway. Tesla's Elon Musk reported no compensation for 2024, although his 2018 stock package worth up to $56 billion remains under court review. Widening pay gap The median CEO earned 192 times what the median worker at their company made. In some industries, the disparity is even more striking. Carnival Corp. reported a CEO-to-worker pay ratio of nearly 1,300:1, and McDonald's was close behind with a 1,000:1 gap. Private-sector wages rose 3.6% in 2024, with the average U.S. worker earning $65,460 annually, or $92,000 including benefits. 'With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,' said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies. "These huge disparities are not only unfair to lower-level workers who are making significant contributions to company value – they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates. ' Female CEO compensation hits record highs The number of women on the list rose to 27, the highest since 2014. Their median compensation was $20 million — a 10.7% rise compared to 9.7% for male CEOs, who earned a median of $16.8 million. Top-earning female CEOs included: Judith Marks, Otis Worldwide – $42.1 million Jane Fraser, Citigroup – $31.1 million Lisa Su, AMD – $31 million Mary Barra, General Motors – $29.5 million Laura Alber, Williams-Sonoma – $27.7 million 'There are maybe a couple more names on the list, but we're really not moving the needle significantly,' said Christy Glass, a sociology professor at Utah State University. She cited the broader slowdown in corporate diversity, equity, and inclusion (DEI) efforts. Security benefits on the Rise Equilar found companies are increasingly offering security-related perks as part of executive compensation, possibly influenced by incidents such as the December shooting of UnitedHealthCare CEO Brian Thompson. Among 208 companies reviewed, median spending on executive security rose from $69,180 in 2023 to $94,276 in 2024. Notable increases came from companies like Centene and Intel. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
CTV News
4 days ago
- Business
- CTV News
CEO pay rose nearly 10% in 2024 as stock prices and profits soared
Ted Sarandos arrives at the premiere of "The Electric State" on Monday, Feb. 24, 2025, at The Egyptian Theatre in Los Angeles. (Photo by Jordan Strauss/Invision/AP, File) The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 10 per cent in 2024 as the stock market enjoyed another banner year and corporate profits rose sharply. Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can't cash in for years, if at all, unless the company meets certain targets, typically a higher stock price or market value or improved operating profits. The Associated Press' CEO compensation survey, which uses data analyzed for The AP by Equilar, included pay data for 344 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30. Here are the key takeaways from the survey: A good year at the top The median pay package for CEOs rose to $17.1 million, up 9.7 per cent. Meanwhile, the median employee at companies in the survey earned $85,419, reflecting a 1.7 per cent increase year over year. CEOs had to navigate sticky inflation and relatively high interest rates last year, as well as declining consumer confidence. But the economy also provided some tail winds: Consumers kept spending despite their misgivings about the economy; inflation did subside somewhat; the Fed lowered interest rates; and the job market stayed strong. The stock market's main benchmark, the S&P 500, rose more than 23 per cent last year. Profits for companies in the index rose more than 9 per cent. '2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions,' said Dan Laddin, a partner at Compensation Advisory Partners. Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies, said there have been some recent 'long-overdue' increases in worker pay, especially for those at the bottom of the wage scale. But she said too many workers in the world's richest countries still struggle to pay their bills. The top earners Rick Smith, the founder and CEO of Axon Enterprises, topped the survey with a pay package valued at $164.5 million. Axon, which makes Taser stun guns and body cameras, saw revenue grow more than 30 per cent for three straight years and posted record annual net income of $377 million in 2024. Axon's shares more than doubled last year after rising more than 50 per cent in 2023. Almost all of Smith's pay package consists of stock awards, which he can only receive if the company meets targets tied to its stock price and operations for the period from 2024 to 2030. Companies are required to assign a value to the stock awards when they are granted. Other top earners in the survey include Lawrence Culp, CEO of what is now GE Aerospac e ($87.4 million), Tim Cook at Apple ($74.6 million), David Gitlin at Carrier Global ($65.6 million) and Ted Sarandos at Netflix ($61.9 million). The bulk of those pay packages consisted of stock or options awards. The median stock award rose almost 15 per cent last year compared to a 4 per cent increase in base salaries, according to Equilar. 'For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses,' said Melissa Burek, also a partner at Compensation Advisory Partners. 'Given the significant role that long-term incentives play in executive pay, this trend makes sense.' Jackie Cook at Morningstar Sustainalytics said the benefit of tying CEO pay to performance is 'that share-based pay appears to provide a clear market signal that most shareholders care about.' But she notes that the greater use of share-based pay has led to a 'phenomenal rise' in CEO compensation 'tracking recent years' market performance,' which has 'widened the pay gap within workplaces.' Some well-known billionaire CEOs are low in the AP survey. Warren Buffett's compensation was valued at $405,000, about five times what a worker at Berkshire Hathaway makes. According to Tesla's proxy, Elon Musk received no compensation for 2024, but in 2018 he was awarded a multiyear package that has been valued at $56 billion and is the subject of a court battle. Other notable CEOs didn't meet the criteria for inclusion the survey. Starbucks' Brian Niccol received a pay package valued at $95.8 million, but he only took over as CEO on Sept. 9. Nvidia's Jensen Huang saw his compensation grow to $49.9 million, but the company filed its proxy after April 30. The pay gap At half the companies in AP's annual pay survey, it would take the worker at the middle of the company's pay scale 192 years to make what the CEO did in one. Companies have been required to disclose this so-called pay ratio since 2018. The pay ratio tends to be highest at companies in industries where wages are typically low. For instance, at cruise line company Carnival Corp., its CEO earned nearly 1,300 times the median pay of $16,900 for its workers. McDonald's CEO makes about 1,000 times what a worker making the company's median pay does. Both companies have operations that span numerous countries. Overall, wages and benefits netted by private-sector workers in the U.S. rose 3.6% through 2024, according to the Labor Department. The average worker in the U.S. makes $65,460 a year. That figure rises to $92,000 when benefits such as health care and other insurance are included. 'With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,' Anderson said. 'These huge disparities are not only unfair to lower-level workers who are making significant contributions to company value – they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates.' Some gains for female CEOs For the 27 women who made the AP survey — the highest number dating back to 2014 — median pay rose 10.7 per cent to $20 million. That compares to a 9.7 pre cent increase to $16.8 million for their male counterparts. The highest earner among female CEOs was Judith Marks of Otis Worldwide, with a pay package valued at $42.1 million. The company, known for its elevators and escalators, has had operating profit above $2 billion for four straight years. About $35 million of Marks' compensations was in the form of stock awards. Other top earners among female CEOs were Jane Fraser of Citigroup ($31.1 million), Lisa Su of Advanced Micro Devices ($31 million), Mary Barra at General Motors ($29.5 million) and Laura Alber at Williams-Sonoma ($27.7 million). Christy Glass, a professor of sociology at Utah State University who studies equity, inclusion and leadership, said while there may be a few more women on the top paid CEO list, overall equity trends are stagnating, particularly as companies cut back on DEI programs. 'There are maybe a couple more names on the list, but we're really not moving the needle significantly,' she said. Prioritizing security Equilar found that a larger number of companies are offering security perquisites as part of executive compensation packages, possibly in reaction to the December shooting of UnitedHealthCare CEO Brian Thompson. Equilar said an analysis of 208 companies in the S&P 500 that filed proxy statements by April 2 showed that the median spending on security rose to $94,276 last year from $69,180 in 2023. Among the companies that increased their security perks were Centene, which provides health care services to Medicare and Medicaid, and the chipmaker Intel. __ Reporters Matt Ott and Chris Rugaber in Washington contributed. Mae Anderson And Paul Harloff, The Associated Press
Globe and Mail
4 days ago
- Business
- Globe and Mail
CEO pay rose nearly 10% in 2024 as stock prices and profits soared
NEW YORK (AP) — The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 10% in 2024 as the stock market enjoyed another banner year and corporate profits rose sharply. Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can't cash in for years, if at all, unless the company meets certain targets, typically a higher stock price or market value or improved operating profits. The Associated Press' CEO compensation survey, which uses data analyzed for The AP by Equilar, included pay data for 344 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30. Here are the key takeaways from the survey: A good year at the top The median pay package for CEOs rose to $17.1 million, up 9.7%. Meanwhile, the median employee at companies in the survey earned $85,419, reflecting a 1.7% increase year over year. CEOs had to navigate sticky inflation and relatively high interest rates last year, as well as declining consumer confidence. But the economy also provided some tail winds: Consumers kept spending despite their misgivings about the economy; inflation did subside somewhat; the Fed lowered interest rates; and the job market stayed strong. The stock market's main benchmark, the S&P 500, rose more than 23% last year. Profits for companies in the index rose more than 9%. '2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions,' said Dan Laddin, a partner at Compensation Advisory Partners. Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies, said there have been some recent 'long-overdue' increases in worker pay, especially for those at the bottom of the wage scale. But she said too many workers in the world's richest countries still struggle to pay their bills. The top earners Rick Smith, the founder and CEO of Axon Enterprises, topped the survey with a pay package valued at $164.5 million. Axon, which makes Taser stun guns and body cameras, saw revenue grow more than 30% for three straight years and posted record annual net income of $377 million in 2024. Axon's shares more than doubled last year after rising more than 50% in 2023. Almost all of Smith's pay package consists of stock awards, which he can only receive if the company meets targets tied to its stock price and operations for the period from 2024 to 2030. Companies are required to assign a value to the stock awards when they are granted. Other top earners in the survey include Lawrence Culp, CEO of what is now GE Aerospac e ($87.4 million), Tim Cook at Apple ($74.6 million), David Gitlin at Carrier Global ($65.6 million) and Ted Sarandos at Netflix ($61.9 million). The bulk of those pay packages consisted of stock or options awards. The median stock award rose almost 15% last year compared to a 4% increase in base salaries, according to Equilar. 'For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses," said Melissa Burek, also a partner at Compensation Advisory Partners. "Given the significant role that long-term incentives play in executive pay, this trend makes sense.' Jackie Cook at Morningstar Sustainalytics said the benefit of tying CEO pay to performance is 'that share-based pay appears to provide a clear market signal that most shareholders care about." But she notes that the greater use of share-based pay has led to a 'phenomenal rise' in CEO compensation 'tracking recent years' market performance,' which has "widened the pay gap within workplaces." Some well-known billionaire CEOs are low in the AP survey. Warren Buffett's compensation was valued at $405,000, about five times what a worker at Berkshire Hathaway makes. According to Tesla's proxy, Elon Musk received no compensation for 2024, but in 2018 he was awarded a multiyear package that has been valued at $56 billion and is the subject of a court battle. Other notable CEOs didn't meet the criteria for inclusion the survey. Starbucks' Brian Niccol received a pay package valued at $95.8 million, but he only took over as CEO on Sept. 9. Nvidia's Jensen Huang saw his compensation grow to $49.9 million, but the company filed its proxy after April 30. The pay gap At half the companies in AP's annual pay survey, it would take the worker at the middle of the company's pay scale 192 years to make what the CEO did in one. Companies have been required to disclose this so-called pay ratio since 2018. The pay ratio tends to be highest at companies in industries where wages are typically low. For instance, at cruise line company Carnival Corp., its CEO earned nearly 1,300 times the median pay of $16,900 for its workers. McDonald's CEO makes about 1,000 times what a worker making the company's median pay does. Both companies have operations that span numerous countries. Overall, wages and benefits netted by private-sector workers in the U.S. rose 3.6% through 2024, according to the Labor Department. The average worker in the U.S. makes $65,460 a year. That figure rises to $92,000 when benefits such as health care and other insurance are included. 'With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,' Anderson said. "These huge disparities are not only unfair to lower-level workers who are making significant contributions to company value – they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates.' Some gains for female CEOs For the 27 women who made the AP survey — the highest number dating back to 2014 — median pay rose 10.7% to $20 million. That compares to a 9.7% increase to $16.8 million for their male counterparts. The highest earner among female CEOs was Judith Marks of Otis Worldwide, with a pay package valued at $42.1 million. The company, known for its elevators and escalators, has had operating profit above $2 billion for four straight years. About $35 million of Marks' compensations was in the form of stock awards. Other top earners among female CEOs were Jane Fraser of Citigroup ($31.1 million), Lisa Su of Advanced Micro Devices ($31 million), Mary Barra at General Motors ($29.5 million) and Laura Alber at Williams-Sonoma ($27.7 million). Christy Glass, a professor of sociology at Utah State University who studies equity, inclusion and leadership, said while there may be a few more women on the top paid CEO list, overall equity trends are stagnating, particularly as companies cut back on DEI programs. 'There are maybe a couple more names on the list, but we're really not moving the needle significantly,' she said. Prioritizing security Equilar found that a larger number of companies are offering security perquisites as part of executive compensation packages, possibly in reaction to the December shooting of UnitedHealthCare CEO Brian Thompson. Equilar said an analysis of 208 companies in the S&P 500 that filed proxy statements by April 2 showed that the median spending on security rose to $94,276 last year from $69,180 in 2023. Among the companies that increased their security perks were Centene, which provides health care services to Medicare and Medicaid, and the chipmaker Intel.
Washington Post
4 days ago
- Business
- Washington Post
How AP and Equilar calculated CEO pay
For its annual analysis of CEO pay , The Associated Press used data provided by Equilar, an executive data firm. Equilar examined regulatory filings detailing the pay packages of 344 executives. Equilar looked at companies in the S&P 500 index that filed proxy statements with federal regulators between Jan. 1 and April 30, 2025. To avoid the distortions caused by sign-on bonuses, the sample includes only CEOs in place for at least two years.
