The heads of American companies lined up on real wages
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The Wall Street Journal has released its annual S&P CEO Compensation Index. Due to a change in the calculation methodology – taking into account the reduction in real rewards due to falling stocks – the top 5 has changed a lot: the pharmaceutical company Regeneron entered there, but Apple did not enter. Even by the usual method of calculating CEO remuneration in 2022, they declined slightly for the first time in more than a decade.
In 2022, the average compensation of CEOs of companies included in the index of the largest US public companies S&P decreased by 1.4% to $14.5 million. The Wall Street Journal with reference to the calculations of the analytical company MyLogIQ. At the same time, remuneration decreased only in comparison with the record year 2021 – the average remuneration was higher than the $13.4 million received in 2020. By comparison, the average CEO remuneration in 2010 was $7.7 million.
More important than the rather modest decline, however, was a new way of counting related to new requirements US Securities and Exchange Commission (SEC). The usual option involves taking into account the remuneration assigned to the top manager, while the new one takes into account how much he actually received, taking into account changes in the value of the company’s shares and other factors. Last year, the SEC tightened reporting requirements for public companies: they must now publish data on actual payments to top managers, as well as how these rewards correlate with the company’s financial results.
When calculating in a new way, the list of leaders changes significantly, because 70-80% of the total remuneration to CEOs is paid in shares. At the same time, last year the shares of most companies fell – the S&P index fell by 20% over the year.
In general, when calculating the actual remuneration paid, it turned out that they were less than at the time of their appointment, about two-thirds of the directors of companies from the S & P-500. In about 140 cases, the rewards, on the contrary, turned out to be higher, and in 46 – at least twice as much.
In both cases, the rating is headed by the head of Alphabet, Sundar Pichai, but if, according to the traditional calculation, his remuneration is $226 million, then when calculating the amount actually paid, taking into account the decrease in the value of the company’s shares, it turned out to be much less – $115.8 billion. Tesla CEO Elon Musk in the past received no remuneration for a year. When counted in a new way, the leaders included the CEO of the pharmaceutical company Regeneron, whose shares rose strongly in a year, as well as energy companies ExxonMobile and Chevron, which, like other oil and gas companies, benefited from rising energy prices.
As before reported Reuters, citing data from research firm Equilar, reported that the average remuneration of the 100 highest-paid CEOs of US companies in 2022 increased by 7.7%, to a record $22.3 million.
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