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NEW YORK -- The emblematic compensation bundle for main executives who tally companies successful the S&P 500 jumped astir 10% successful 2024 arsenic the stock marketplace enjoyed different banner year and firm profits roseate sharply.
Many companies person heeded calls from shareholders to necktie CEO compensation much intimately to performance. As a result, a ample proportionality of wage packages dwell of banal awards, which the CEO often can’t currency successful for years, if astatine all, unless the institution meets definite targets, typically a higher banal terms oregon marketplace worth oregon improved operating profits.
The Associated Press’ CEO compensation survey, which uses information analyzed for The AP by Equilar, included wage information for 344 executives astatine S&P 500 companies who person served astatine slightest 2 afloat consecutive fiscal years astatine their companies, which filed proxy statements betwixt Jan. 1 and April 30.
Here are the cardinal takeaways from the survey:
The median wage bundle for CEOs roseate to $17.1 million, up 9.7%. Meanwhile, the median worker astatine companies successful the survey earned $85,419, reflecting a 1.7% summation twelvemonth implicit year.
CEOs had to navigate sticky ostentation and comparatively precocious involvement rates past year, arsenic good arsenic declining user confidence. But the system besides provided immoderate process winds: Consumers kept spending contempt their misgivings astir the economy; ostentation did subside somewhat; the Fed lowered involvement rates; and the job marketplace stayed strong.
The banal market's main benchmark, the S&P 500, roseate much than 23% past year. Profits for companies successful the scale roseate much than 9%.
“2024 was expected to beryllium a beardown year, truthful the (nearly) 10% increases are commensurate with the timing of the wage decisions,” said Dan Laddin, a spouse astatine Compensation Advisory Partners.
Sarah Anderson, who directs the Global Economy Project astatine the progressive Institute for Policy Studies, said determination person been immoderate caller “long-overdue” increases successful idiosyncratic pay, particularly for those astatine the bottommost of the wage scale. But she said excessively galore workers successful the world's richest countries inactive conflict to wage their bills.
Rick Smith, the laminitis and CEO of Axon Enterprises, topped the survey with a wage bundle valued astatine $164.5 million. Axon, which makes Taser stun guns and assemblage cameras, saw gross turn much than 30% for 3 consecutive years and posted grounds yearly nett income of $377 cardinal successful 2024. Axon's shares much than doubled past twelvemonth aft rising much than 50% successful 2023.
Almost each of Smith's wage bundle consists of banal awards, which helium tin lone person if the institution meets targets tied to its banal terms and operations for the play from 2024 to 2030. Companies are required to delegate a worth to the banal awards erstwhile they are granted.
Other apical earners successful the survey see Lawrence Culp, CEO of what is present GE Aerospac e ($87.4 million), Tim Cook astatine Apple ($74.6 million), David Gitlin astatine Carrier Global ($65.6 million) and Ted Sarandos astatine Netflix ($61.9 million). The bulk of those wage packages consisted of banal oregon options awards.
The median banal grant roseate astir 15% past twelvemonth compared to a 4% summation successful basal salaries, according to Equilar.
“For CEOs, people semipermanent incentives consistently summation much each twelvemonth than salaries oregon bonuses," said Melissa Burek, besides a spouse astatine Compensation Advisory Partners. "Given the important relation that semipermanent incentives play successful enforcement pay, this inclination makes sense.”
Jackie Cook astatine Morningstar Sustainalytics said the payment of tying CEO wage to show is “that share-based wage appears to supply a wide marketplace awesome that astir shareholders attraction about." But she notes that the greater usage of share-based wage has led to a “phenomenal rise” successful CEO compensation “tracking caller years' marketplace performance,” which has "widened the wage spread wrong workplaces."
Some well-known billionaire CEOs are debased successful the AP survey. Warren Buffett's compensation was valued astatine $405,000, astir 5 times what a idiosyncratic astatine Berkshire Hathaway makes. According to Tesla’s proxy, Elon Musk received nary compensation for 2024, but successful 2018 helium was awarded a multiyear bundle that has been valued astatine $56 cardinal and is the taxable of a tribunal battle.
Other notable CEOs didn't conscionable the criteria for inclusion the survey. Starbucks' Brian Niccol received a wage bundle valued astatine $95.8 million, but helium lone took implicit arsenic CEO connected Sept. 9. Nvidia's Jensen Huang saw his compensation turn to $49.9 million, but the institution filed its proxy aft April 30.
At fractional the companies successful AP’s yearly wage survey, it would instrumentality the idiosyncratic astatine the mediate of the company’s wage standard 192 years to marque what the CEO did successful one. Companies person been required to disclose this alleged wage ratio since 2018.
The wage ratio tends to beryllium highest astatine companies successful industries wherever wages are typically low. For instance, astatine cruise enactment institution Carnival Corp., its CEO earned astir 1,300 times the median wage of $16,900 for its workers. McDonald's CEO makes astir 1,000 times what a idiosyncratic making the company's median wage does. Both companies person operations that span galore countries.
Overall, wages and benefits netted by private-sector workers successful the U.S. roseate 3.6% done 2024, according to the Labor Department. The mean idiosyncratic successful the U.S. makes $65,460 a year. That fig rises to $92,000 erstwhile benefits specified arsenic wellness attraction and different security are included.
“With CEO wage continuing to climb, we inactive person an tremendous occupation with excessive wage gaps,” Anderson said. "These immense disparities are not lone unfair to lower-level workers who are making important contributions to institution worth – they besides undercut endeavor effectiveness by lowering worker morale and boosting turnover rates.”
For the 27 women who made the AP survey — the highest fig dating backmost to 2014 — median wage roseate 10.7% to $20 million. That compares to a 9.7% summation to $16.8 cardinal for their antheral counterparts.
The highest earner among pistillate CEOs was Judith Marks of Otis Worldwide, with a wage bundle valued astatine $42.1 million. The company, known for its elevators and escalators, has had operating nett supra $2 cardinal for 4 consecutive years. About $35 cardinal of Marks' compensations was successful the signifier of banal awards.
Other apical earners among pistillate CEOs were Jane Fraser of Citigroup ($31.1 million), Lisa Su of Advanced Micro Devices ($31 million), Mary Barra astatine General Motors ($29.5 million) and Laura Alber astatine Williams-Sonoma ($27.7 million).
Christy Glass, a prof of sociology astatine Utah State University who studies equity, inclusion and leadership, said portion determination whitethorn beryllium a fewer much women connected the apical paid CEO list, wide equity trends are stagnating, peculiarly arsenic companies chopped backmost connected DEI programs.
“There are possibly a mates much names connected the list, but we’re truly not moving the needle significantly,” she said.
Equilar recovered that a larger fig of companies are offering information perquisites arsenic portion of enforcement compensation packages, perchance successful absorption to the December shooting of UnitedHealthCare CEO Brian Thompson.
Equilar said an investigation of 208 companies successful the S&P 500 that filed proxy statements by April 2 showed that the median spending connected information roseate to $94,276 past twelvemonth from $69,180 successful 2023.
Among the companies that accrued their information perks were Centene, which provides wellness attraction services to Medicare and Medicaid, and the chipmaker Intel.
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Reporters Matt Ott and Chris Rugaber successful Washington contributed.
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