Adobe

Annual meeting: 4/20/2021

Adobe CEO Shantanu Narayen’s 2020 total disclosed compensation of $45,889,954 in 2020 includes an increase in both his stock award and his non-equity incentive pay and results in a 17% overall increase in compensation from 2019. Last year’s package earned Narayen a ranking of 51 in As You Sow’s list of 100 Most Overpaid CEOs. A regression analysis by HIP Investor on that pay package calculated that pay based on his performance should have been $15,108,361 million; instead, his 2019 compensation was $39,145,631. The excess calculated was 159%.

Narayen’s high annual compensation is just the beginning of the story, as it is dwarfed by the extraordinary amount of equity earnings. In 2020, he acquired 236,780 shares of a stock award vested for a value of $83.7 million. Furthermore, between 2016 and 2019, he realized more than $219 million in value through the exercise of stock options and vesting of equity awards, some of which I wrote about here.

Narayen does not continue to hold onto his shares after they vest which is best practice. Indeed, despite his long tenure with the company and multiple awards he currently holds only 365,345 shares of Adobe stock. This is less than the amount he held in 2016.

Adobe’s CEO pay package this year exemplifies what Adam Kanzer, Head of Stewardship for the Americas at BNPP AM, discussed on a panel last year, stating: “Some pay packages are so large they can actually immunize the CEO from the power of incentives [compensation committees] are creating because when the CEO has so much money there’s very little at risk.”