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Chicago Tribune
2 days ago
- Business
- Chicago Tribune
CEO pay rose nearly 10% in 2024 as stock prices and profits soared
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 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: 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. 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 Aerospace ($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. 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.' 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. 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.
2 days ago
- Business
CEO pay rose nearly 10% in 2024 as stock prices and profits soared
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 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: 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. 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. 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.' 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. 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.
Euronews
22-05-2025
- Politics
- Euronews
Trump confronts South Africa's Ramaphosa with baseless claims of systematic killing of white farmers
ADVERTISEMENT US President Donald Trump used a White House meeting to forcefully confront South African President Cyril Ramaphosa, accusing the country of failing to address Trump's baseless claim of the systematic killing of white farmers. In an astonishing display, Trump even dimmed the lights in the Oval Office to play a video of a far-left politician singing a song with the lyrics 'kill the farmer.' He also reviewed news articles to emphasise his argument, stating that the nation's white farmers have encountered 'death, death, death, horrible death.' Trump had previously terminated all US aid to South Africa and extended a welcome to numerous white South African farmers, granting them refugee status in the United States, while advocating the notion that a "genocide" is unfolding in the nation. The 47th US president has initiated a series of allegations against the Black-led government of South Africa, asserting that it is confiscating land from white farmers, implementing policies that are discriminatory towards whites, and adopting a foreign policy that is antagonistic towards Washington. 'People are fleeing South Africa for their own safety,' Trump said. 'Their land is being confiscated and in many cases they're being killed.' President Donald Trump speaks as he meets with South African President Cyril Ramaphosa in the Oval Office of the White House, Wednesday, May 21, 2025, in Washington Evan Vucci/Copyright 2025 The AP. All rights reserved According to experts in South Africa, there is no evidence to suggest that whites are being specifically targeted due to their race; however, farmers of all ethnic backgrounds are victims of violent home invasions in a nation with a notoriously high crime rate. Ramaphosa countered Trump's allegations, aiming to clarify the situation and restore South Africa's ties with the United States. The bilateral relationship currently stands at its lowest level since the end of apartheid in 1994. 'We are completely opposed to that,' Ramaphosa said of the behaviour alleged by Trump in their exchange. He added, 'that is not government policy' and 'our government policy is completely, completely against what he was saying.' Trump quickly countered saying 'When they take the land, they kill the white farmer.' The US president appeared prepared to confront Ramaphosa in the Oval Office, a scene which has been of frequent occurrence since Trump and Vice President JD Vance shouted at visiting Ukrainian President Volodymyr Zelenskyy a few months ago. President Donald Trump greets South African President Cyril Ramaphosa at the White House, Wednesday, May 21, 2025, in Washington Julia Demaree Nikhinson/Copyright 2025 The AP. All rights reserved. Videos were cued on a large television screen to display a segment featuring Julius Malema, the leader of an opposition party, performing a classic anti-apartheid song. The song has sparked controversy in the nation for many years due to its provocative lyrics, which include the phrases 'kill the Boer' and 'shoot the Boer,' with 'Boer' denoting a white farmer. Malema, who appears in the video, is not affiliated with the current governing coalition. Another segment displayed white crosses along a roadside, identified as a tribute to white farmers who have lost their lives. Ramaphosa appeared perplexed, stating, 'I'd like to know where that is, because this I've never seen.' The references made by the Trump administration to the Afrikaner population, which descends from Dutch and other European settlers, have further amplified earlier assertions put forth by Trump's South African-born advisor Elon Musk and various conservative commentators in the United States. President Donald Trump meets South African President Cyril Ramaphosa in the Oval Office of the White House, Wednesday, May 21, 2025, in Washington Evan Vucci/Copyright 2025 The AP. All rights reserved These claims suggest that the South African government is permitting assaults on white farmers, which they constitute as a form of genocide. Ramaphosa entered the meeting aiming to steer clear of the contentious interactions that Zelenskyy faced during his February visit. That unfortunate meeting concluded with White House officials requesting Zelenskyy and his team to vacate the premises. After the heated discussion captured by the media, Trump invited Ramaphosa for a luncheon and additional discussions. Ramaphosa, addressing reporters after his visit to the White House, downplayed Trump's criticisms, asserting that their private conversation did not focus on the US president's concerns regarding white farmers. 'You wanted to see drama and something really big happening,' he said, 'And I'm sorry that we disappointed you somewhat when it comes to that.'
New Indian Express
17-05-2025
- Business
- New Indian Express
Microsoft says it provided AI to Israeli military for war but denies use to harm people in Gaza
Microsoft said Thursday that employee concerns and media reports had prompted the company to launch an internal review and hire an external firm to undertake 'additional fact-finding.' The statement did not identify the outside firm or provide a copy of its report. The statement also did not directly address several questions about precisely how the Israeli military is using its technologies, and the company declined Friday to comment further. Microsoft declined to answer written questions from The AP about how its AI models helped translate, sort and analyze intelligence used by the military to select targets for airstrikes. The company's statement said it had provided the Israeli military with software, professional services, Azure cloud storage and Azure AI services, including language translation, and had worked with the Israeli government to protect its national cyberspace against external threats. Microsoft said it had also provided 'special access to our technologies beyond the terms of our commercial agreements' and 'limited emergency support' to Israel as part of the effort to help rescue the more than 250 hostages taken by Hamas on Oct. 7. 'We provided this help with significant oversight and on a limited basis, including approval of some requests and denial of others,' Microsoft said. 'We believe the company followed its principles on a considered and careful basis, to help save the lives of hostages while also honoring the privacy and other rights of civilians in Gaza.' The company did not answer whether it or the outside firm it hired communicated or consulted with the Israeli military as part of its internal probe. It also did not respond to requests for additional details about the special assistance it provided to the Israeli military to recover hostages or the specific steps to safeguard the rights and privacy of Palestinians. In its statement, the company also conceded that it 'does not have visibility into how customers use our software on their own servers or other devices.' The company added that it could not know how its products might be used through other commercial cloud providers.
The Hindu
17-05-2025
- Business
- The Hindu
Microsoft says it provided AI to Israeli military for war but denies use to harm people in Gaza
Microsoft acknowledged Thursday that it sold advanced artificial intelligence and cloud computing services to the Israeli military during the war in Gaza and aided in efforts to locate and rescue Israeli hostages. But the company also said it has found no evidence to date that its Azure platform and AI technologies were used to target or harm people in Gaza. The unsigned blog post on Microsoft's corporate website appears to be the company's first public acknowledgement of its deep involvement in the war, which started after Hamas killed about 1,200 people in Israel and has led to the deaths of tens of thousands in Gaza. It comes nearly three months after an investigation by The Associated Press revealed previously unreported details about the American tech giant's close partnership with the Israeli Ministry of Defense, with military use of commercial AI products skyrocketing by nearly 200 times after the deadly Oct. 7, 2023, Hamas attack. The AP reported that the Israeli military uses Azure to transcribe, translate and process intelligence gathered through mass surveillance, which can then be cross-checked with Israel's in-house AI-enabled targeting systems and vice versa. The partnership reflects a growing drive by tech companies to sell their artificial intelligence products to militaries for a wide range of uses, including in Israel, Ukraine and the United States. However, human rights groups have raised concerns that AI systems, which can be flawed and prone to errors, are being used to help make decisions about who or what to target, resulting in the deaths of innocent people. Microsoft said Thursday that employee concerns and media reports had prompted the company to launch an internal review and hire an external firm to undertake 'additional fact-finding.' The statement did not identify the outside firm or provide a copy of its report. The statement also did not directly address several questions about precisely how the Israeli military is using its technologies, and the company declined Friday to comment further. Microsoft declined to answer written questions from The AP about how its AI models helped translate, sort and analyse intelligence used by the military to select targets for airstrikes. The company's statement said it had provided the Israeli military with software, professional services, Azure cloud storage and Azure AI services, including language translation, and had worked with the Israeli government to protect its national cyberspace against external threats. Microsoft said it had also provided 'special access to our technologies beyond the terms of our commercial agreements' and 'limited emergency support' to Israel as part of the effort to help rescue the more than 250 hostages taken by Hamas on Oct. 7. 'We provided this help with significant oversight and on a limited basis, including approval of some requests and denial of others,' Microsoft said. 'We believe the company followed its principles on a considered and careful basis, to help save the lives of hostages while also honoring the privacy and other rights of civilians in Gaza.' The company did not answer whether it or the outside firm it hired communicated or consulted with the Israeli military as part of its internal probe. It also did not respond to requests for additional details about the special assistance it provided to the Israeli military to recover hostages or the specific steps to safeguard the rights and privacy of Palestinians. In its statement, the company also conceded that it 'does not have visibility into how customers use our software on their own servers or other devices.' The company added that it could not know how its products might be used through other commercial cloud providers. In addition to Microsoft, the Israeli military has extensive contracts for cloud or AI services with Google, Amazon, Palantir and several other major American tech firms. Microsoft said the Israeli military, like any other customer, was bound to follow the company's Acceptable Use Policy and AI Code of Conduct, which prohibit the use of products to inflict harm in any way prohibited by law. In its statement, the company said it had found 'no evidence' the Israeli military had violated those terms. Emelia Probasco, a senior fellow for the Center for Security and Emerging Technology at Georgetown University, said the statement is noteworthy because few commercial technology companies have so clearly laid out standards for working globally with international governments. 'We are in a remarkable moment where a company, not a government, is dictating terms of use to a government that is actively engaged in a conflict,' she said. 'It's like a tank manufacturer telling a country you can only use our tanks for these specific reasons. That is a new world.' Israel has used its vast trove of intelligence to both target Islamic militants and conduct raids into Gaza seeking to rescue hostages, with civilians often caught in the crossfire. For example, a February 2024 operation that freed two Israeli hostages in Rafah resulted in the deaths of 60 Palestinians. A June 2024 raid in the Nuseirat refugee camp freed four Israeli hostages from Hamas captivity but resulted in the deaths of at least 274 Palestinians. Overall, Israel's invasions and extensive bombing campaigns in Gaza and Lebanon have resulted in the deaths of more than 50,000 people, many of them women and children. No Azure for Apartheid, a group of current and former Microsoft employees, called on Friday for the company to publicly release a full copy of the investigative report. 'It's very clear that their intention with this statement is not to actually address their worker concerns, but rather to make a PR stunt to whitewash their image that has been tarnished by their relationship with the Israeli military,' said Hossam Nasr, a former Microsoft worker fired in October after he helped organise an unauthorized vigil at the company's headquarters for Palestinians killed in Gaza. Cindy Cohn, executive director of the Electronic Frontier Foundation, applauded Microsoft Friday for taking a step toward transparency. But she said the statement raised many unanswered questions, including details about how Microsoft's services and AI models were being used by the Israeli military on its own government servers. 'I'm glad there's a little bit of transparency here,' said Cohn, who has long called on U.S. tech giants to be more open about their military contracts. 'But it is hard to square that with what's actually happening on the ground.'
