Latest news with #corporateprofits
Washington Post
3 days ago
- Business
- Washington Post
Americans are pulling back as tariff turmoil adds to economic uncertainty
Americans watching the turmoil with tariffs have begun pulling back on spending, as President Donald Trump's trade war continues to stir up economic uncertainty. Consumer spending growth slowed significantly in the first three months of the year, to 1.2 percent from 4 percent a quarter earlier, according to newly revised gross domestic product data released Thursday. And it's becoming clear that curtailed spending, combined with higher costs from tariffs, is affecting businesses, too. Corporate profits fell sharply, by $118 billion, in the first quarter, the largest drop since early in the pandemic, the GDP report showed.
Free Malaysia Today
4 days ago
- Business
- Free Malaysia Today
US corporate profits decrease sharply in Q1
US President Donald Trump's sweeping import duties have cast a shadow over the economy. (File pic) WASHINGTON : US corporate profits fell sharply in the first quarter (Q1) and could continue to be squeezed this year by higher costs from tariffs that are threatening to undercut the economic expansion. Profits from current production with inventory valuation and capital consumption adjustments dropped US$118.1 billion last quarter, the commerce department's bureau of economic analysis (BEA) said today. Profits surged US$204.7 billion in the October-December quarter. President Donald Trump's sweeping import duties have cast a shadow over the economy, knocking business and consumer sentiment as well as unleashing unprecedented volatility on financial markets. Yesterday, a US trade court blocked most of Trump's tariffs from going into effect in a sweeping ruling that the president overstepped his authority. Economists said the ruling, while it offered some relief, had added another layer of uncertainty over the economy. The increasingly uncertain environment was echoed in minutes of the Federal Reserve's May 6-7 meeting published yesterday, which noted 'participants judged that downside risks to employment and economic activity and upside risks to inflation had risen, primarily reflecting the potential effects of tariff increases'. Companies ranging from airlines, retailers to motor vehicle manufacturers have either withdrawn or refrained from giving financial guidance for 2025, citing the uncertainty caused by the on-again and off-again nature of some duties. Businesses front-loaded imports and households engaged in pre-emptive buying of goods last quarter to avoid higher costs, making it difficult to get a clear picture of the economy. 'The deluge of imports sent gross domestic product (GDP) declining at an upwardly revised 0.2% annualised rate in the January-March quarter,' the BEA said in its second estimate of GDP. The economy was initially estimated to have contracted at a 0.3% pace. It grew at a 2.4% rate in the fourth quarter (Q4). When measured from the income side, the economy also contracted at a 0.2% rate in Q1. Gross domestic income (GDI) expanded at a 5.2% pace in the October-December quarter. The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, declined at a 0.2% rate. Gross domestic output grew at a 3.8% pace in Q4.
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.
The Independent
4 days ago
- Business
- The Independent
CEO pay rose nearly 10% in 2024 as stock prices and profits soared
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. __
