CEO Pay Soars In 2016 As Employee Wages Continue To Stagnate

Tyler Durden's picture

CEO pay increases took a brief pause in 2015 dropping to a paltry median of just $10.8 million with most getting a pay cut or a raise of less than 1.5%.  But, as the Wall Street Journal points out this morning, the CEO's of America can once again rest assured that their families will not starve to death as 2016 pay soared nearly 7% setting a post-recession record.

Median pay for the chief executives of 104 of the biggest American companies rose 6.8% for fiscal 2016 to $11.5 million, on track to set a postrecession record, according to a Wall Street Journal analysis.

 

Twice as many companies increased their chiefs’ pay as reduced it, though a few high-profile bosses took substantial pay cuts, including Apple Inc.’s Tim Cook and General Electric Co.’s Jeff Immelt.

 

The higher pay was doled out as the stock market notched strong gains and corporate profits rebounded over the course of 2016. “If ever there was going to be a good year for CEO pay, it was going to be 2016,” said David Yermack, a finance professor at New York University’s Stern School of Business who studies executive pay.

As usual, operating results had limited impact on CEO earnings potential and some of the largest payouts went to CEO's who were fired in 2016.

Some of the biggest paydays went to companies in transition—or even turmoil. Philippe Dauman, who was forced out as chief of media giant Viacom Inc. in August, made $93 million during the year. The total includes $58 million of exit payments, promised under his 2015 employment agreement. A Viacom spokesman declined to comment.

 

At Johnson Controls International PLC, Alex Molinaroli made $46.4 million in the year ended Sept. 30, more than double the $21.7 million he made the prior year. Last fall, he split off an auto-parts business that accounted for a significant part of Johnson Controls’ revenue and closed a $14 billion merger with Tyco International PLC. A Johnson Controls spokesman declined to comment.

 

Meg Whitman made $35.6 million in the year ended Oct. 31 as chief executive of Hewlett Packard Enterprise Co., which was created when she split Hewlett-Packard Co. into two companies in late 2015. That is more than double the $17.1 million she made a year earlier at the combined company.

 

Her latest package included a special equity grant tied to the launch of HP Enterprise. Aside from such one-time items, “Meg’s target compensation has remained unchanged over the past three years,’’ an HP Enterprise spokeswoman said, referring to a portion of the CEO’s pay package.

 

Thomas Falk of Kimberly-Clark Corp. received a 29% raise, compared with a 21% pay cut in 2015 and bringing his total compensation to $15.7 million in 2016 from $15.4 million two years earlier.

 

Mr. Falk’s raise came even as the maker of Huggies diapers and Kleenex tissues posted a shareholder return of -7.7% last year compared with 14% a year earlier.

 

A Kimberly-Clark spokesman said the company considers its three-year shareholder return of 25% and five-year return of 90% better measures of Mr. Falk’s performance.

And here's how the top 20 highest paid CEO's in America made out in 2016:

CEO

 

Much of the higher pay was awarded in various forms of restricted stock or stock options. The compensation increases have come about because rising equity awards have more than made up for declines in cash incentive pay, according to a separate analysis by Institutional Shareholder Services, the large proxy advisory firm.

While cash bonuses have fallen about 1.4% among the companies that have filed pay disclosures, stock awards have risen 7.4% and option awards have risen 3%, noted John Roe, head of analytics at ISS.

Of course, that's hardly any consolation for the average American worker who just saw his real earnings collapse over the past two years and actually turn negative in 2017.

Real Wages

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847328_3527's picture

Highest CEO pay and bonuses ever!

Proves claims that Hillary and Obama respresented "the oppressed" and "the everyday American."

Now, get back to work, Bitches!

Looney's picture

 

All CEOs of all public companies are puppets of the Wall Street.

The time when a CEO would worry about production or customer service is long gone!

All they worry about is the stock price. NOTHING ELSE!

Looney

Luc X. Ifer's picture

The system works perfectly, as per design, bitches!

hedgeless_horseman's picture

 

It is tough being The Guy in any organization, always on point, always having to set an example when you cross paths with the rank and file. 

Joe Davola's picture

It's their fiduciary responsibility.

And hey, if it jacks up the price of their RSO's - that's just a happy coincidence.

Looney's picture

 

Not to argue witcha, but PROFIT is their fiduciary responsibility, and then comes the Stock Price.

Examples? Snap, Twitter, Amazon, Tesla…

Looney

TeethVillage88s's picture

If they have High Overhead/Admin Costs...

Fancy Offices, Nice new building, Great office furniture, Expensive Management...

- This deprives Stock and Bond Investors of Return on Investment, right?
- Apple Designs a New Campus which is huge, private compound, Solar panels, Energy Generation Plant, Under Ground Parking... THEN if the Bond Price goes down, Dividends are smaller, and maybe the Stock price tanks... Investors have little protection unless they become activists?

Handful of Dust's picture

Their salaries will soar even higher after they hire a few more  million immigrants and cheap labor thanks to the 9th Circus.

gatorengineer's picture

Does anyone else find it od, that not a single bank or tech CEO is on the list?  Zewberg, and the goldman tribe didnt make it huh?  Believe that and I got a bridge to sell you.  This info is groomed and picked.

DrData02's picture

They are not puppets of Wall Street at all. They are using Wall Street to strip-mine the wealth of the middle class. They are part of Wall Street.

Ricki13th's picture

Agreed and Trump is no different more tax cuts for the wealthy via Rinocare and the wealth transfer continues. 

ZD1's picture

"Proves claims that Hillary and Obama respresented "the oppressed" and "the everyday American."

 

Hillary supporter and Yahoo CEO Marissa Mayer's severance package isn't the $55 million disclosed in corporate filing last July, or even $44 million estimated in a filing last September

Yahoo's latest disclosure leaves off tens of millions of dollars in stock options held by Mayer as of March 8, but already vested. So they aren’t subject to the accelerated vesting of $20 million in stock incentives that would result from the sale and Mayer’s departure from the company. That acceleration would provide the bulk of her severance. It's some $56.8 million in options evidently have vested since the Verizon deal was announced in July which puts Mayer’s out-the-door price nearer to $80 million.

 

http://www.latimes.com/ct-hiltzik-marissa-mayer-severance-yahoo-20170320...

 


Zarbo's picture

I'm ready to "get mine" and get out.  Screw the rest of you.  /sarc

adr's picture

This is my favorite description of the market and our current eCONomy:

Salesforce.com (styled as salesƒorce) is an American cloud computing company headquartered in San Francisco, California. Though its revenue comes from a customer relationship management (CRM) product, Salesforce also capitalizes on commercial applications of social networking through acquisition. As of early 2016, it is one of the most highly valued American cloud computing companies with a market capitalization above $55 billion,[5] although the company has never turned a GAAP profit in any fiscal year since its inception in 1999.[6][7]

TeethVillage88s's picture

I bet they have high overhead/admin costs.

Great Offices.
Perks.
Accoutrements.
Auto Fleet.
Drivers?
Houses, Apartments, Vacation Homes?

larz's picture

CEOs and public servants deserve what they pay themselves  they are indispensable very important human beings.  Just look around isn't everything great!!!!  Don't forget entertainers give them a raise especially athletes.   Yeah baby

 

A few years back the shitcago postmaster spent about 1 mil on an office build out in the same year the post office moved into new digs it takes a special intellect to make those outstanding decisions under enormous pressure. Look at all the accountability  I sure couldn't handle it

 

 

hongdo's picture

I once did a calculation on a pay raise for one CEO.  For the same amount of money he could have given a $10,000 raise to all of his employees.  I understand wanting to have enough money to achieve freedom and independence, but after you have enough money to do whatever you want, grubbing for more is just an evil and stupid waste of the little time you have left.

Shadow1275's picture

That's Socialism for you. The ppl trust the government to represent them, give up their private unions which protected them, and then the 1% buys out the government essentially ensuring that they have no opposition.

 

Hope you idiot leftists enjoy your Hopium as you continue to destroy families, incite wars (Majority of wars were fought under leftists such as Adolf Hitler, Woodrow Wilson, FDR), and make life in general a shithole for everybody..... except for the one percent like Killary, Mccain, Obama, Soros, and Bush who you apparently worship.

HRClinton's picture

No, that's ARISTOCRACY for you. It's FEUDALISM. 

A Master - Servant relationship. The corporate aristocrats have an entitlement mentality to rule and to perpetual wealth.

They own, you rent.

They decide who they will let join the ranks or into the Club. 

Snípéir_Ag_Obair's picture

tax capital gains above 500k (say) at the highest marginal rate.

And start taxing money earned in the US then kept offshore with a 30% tax or lien on us property.

something... otherwise in the long run we will have an economy based on people delivering pizza to each other.

therover's picture

Won't solve a thing. It's the LOOPHOLES in the system that need to be eliminated.

You know, things like getting a billion handed to you and then be allowed to 'tax shelter' it.

CJgipper's picture

All income should be taxed as income.  We should not have special categories of income.  People who don't work for their money should pay the same taxes I do.

I am Jobe's picture

No mention of Dell EMC and other large Private Companies fleecing their employees 

moonmac's picture

“Too Big To Fail is as American as Apple Pie” said all the Commie Traitors who should have been lined up and shot in the public square.

Since the beginning of man nobody has ever been too big to fail. A hard rock, sharp knife or well placed bullet is what humans have always used to prove failure is always a possibility, no matter who says it's not.

BingoBoggins's picture

Well, there's a unique headline.

Grandad Grumps's picture

The banks and insurance companies seem to be missing.

Where is Mr. Jamie "because I am richer than you" Dimon? What about other privately held financial institutions and partnerships. What about international?

Industrials are just a small piece of the theft.

TeethVillage88s's picture

Don't worry Pensions are out of sight and out of mind.

Jeff Reeves editor InvestorPlace.com. ( @JeffReevesIP )
http://www.marketwatch.com/story/why-your-states-public-pension-plan-is-... ($6 Trillion USD Shortage)
Ed Bartholomew consultant pension financial management ( @e_bartholomew )
Jeremy Gold Society of Actuaries / American Academy of Actuaries ( @jeremygold )

http://www.pensiontsunami.com/

Smedley's picture

I thought Obungler was going to fix that?

south40_dreams's picture

Fix? You're not paying attention

Silver Bullet's picture

If you had ears or an ability to read at a 1st grade level you would realized that Obama ran as a centrist, keep on keeping on administration.
Which is exactly what he did. Go and ahead and prove me wrong with actual facts, not Alex Jones rambling quotes.

But, I'm sure Donny is working on this issue as we speak...HA!

You Trump people get exactly what you deserve...your miserable lives.

ZD1's picture

Obozo's hopey dopey promises of change were hardly centrist. 

 

south40_dreams's picture

"Asking if/how much you will be paid is against our corporate values "

TeethVillage88s's picture

John Rockefeller was known to give people a Dime.

I guess that sounds about right if we are starving and count on help from Executives.

GRDguy's picture

However, he'd already stolen six nickels from you, one way or another.

GRDguy's picture

These sociopaths lie and steal from everyone.  

The lie: "We can't afford to give you a raise, not even for cost of living."

The steal: Your profits from your labor goes right to the top.

Latest example: (Iger from Disney on the list above)

http://money.cnn.com/2017/03/17/news/companies/disney-workers-back-pay/

Tractare Veritatem's picture

Oh god damn it.

Most CEO's, and most certainly the ones listed in the chart, have compensation based upon the stock market and draw little (if any) salary.
ZH has been talking about the market being growing without reason, well guess what - CEO's are cashing out (options, RSU's, etc.) at today's high prices. 
Does this mean "CEO Pay Is Soaring"?  No - their compensation is likely changed very little YoY, but they are cashing out in the irrational stock market.

Salaried worker pay going down - this reflects ZH's analysis to the currently irrational stock market, and reality in the business world (outside of stocks, businesses are struggling).

Progressives/Socialists - cut it with the tut-tutting.  You're still wrong.  So are Bernie, Hillary, and any other prog/soc firebrand.

Tractare Veritatem's picture

Oh god damn it.

Most CEO's, and most certainly the ones listed in the chart, have compensation based upon the stock market and draw little (if any) salary.
ZH has been talking about the market being growing without reason, well guess what - CEO's are cashing out (options, RSU's, etc.) at today's high prices. 
Does this mean "CEO Pay Is Soaring"?  No - their compensation is likely changed very little YoY, but they are cashing out in the irrational stock market.

Salaried worker pay going down - this reflects ZH's analysis to the currently irrational stock market, and reality in the business world (outside of stocks, businesses are struggling).

Progressives/Socialists - cut it with the tut-tutting.  You're still wrong.  So are Bernie, Hillary, and any other prog/soc firebrand.

64n6l4nd's picture

 

 

 

OH MY GOD HOLY SHIT YOURE SUCH A FUCKING IDIOT!

 

MY GOD WE'RE FUCKING DOOMED......UNBELIEVABLE SHIT...YOU EXPRESS YOURSELF BY REGURGITATING SHIT YOU HAVE NO CLUE ABOUT...

 

REMEDIAL MEME-TALKING FAGGOTERY

 

 


Sledge-hammer's picture

There-in lies the problem with the $15/hr minimum wage.  It leaves less money available for CEO pay/bonuses.  We need to get those CEO bonuses up boys.

Angry White Guy's picture

We have a corrupt society at every level.  This is just one of many data points depicting such. Companies view employees as wage mules and interchangable cogs instead of human beings.

They look at all of us that way.

Vonhoff5's picture

In 2008 the entire financial crisis could have been avoided by less than 100 people - the compensation committees on the Board of Directors for each of the big banks. Most comp committees are about three people, multiple that by 30 banks and you have most of the mess covered. If the comp committees work for shareholders (ha!) CEOs would also feel the pain of their mistakes. Not saying I like the huge compsation these guys get but with that upside they should share in the downside equally, which would mean severe jail time, like high security jails vs the country club) loss of all income past present future, determined by a jury of the people, not their peers. The problem is when these guys fail they they sail , into the sunset with huge $$$ packages.

64n6l4nd's picture

 

 

 

YELLEN JEW CUNT -  

 

"So we're talking about a gradual path of removing policy accommodation as the economy makes progress moving toward neutral."

 


TRANSLATION--  

 

We're keeping our eyes peeled for even the slightest uptick in wages, but we'll continue to price cash below the rate of inflation so the investor class can make out like bandits.

 

we just need to tweak rates a bit to dampen the prospect of higher wages.

 

YELLEN JEW CUNT -

 

"I would describe some measures of wage growth as having moved up some."

 

 

TRANSLATION --

 

Battle Stations! Battle Stations! Full Red Alert!

 

 

YELLEN JEW CUNT -

 

"Some measures haven't moved up, but there's also suggestive of a strengthening labor market."

TRANSLATION -

 

"Suggestive" In other words, the mere hint of improving conditions in the labor market -- which could result in higher wages -- is enough to send Yellen into a rate-hike frenzy

 

 

CUNT TALKING OUT OF BOTH ORIFICES; YOU WANT TO TARGET INFLATION OR DEFLATION YOU JEW CUNT?

 

NEITHER YOUR TARGETING CLASS. 

 

THIS IS A FUCKING CLASS WAR.

 

 

 


Blazing in BC's picture

Lucky for these people that all the muggings, car jackings, home invasions, murders overdoses etc are not in their neighborhoods yet.