If American CEO compensation is indeed tied to company performance, many are getting overpaid, according to one corporate responsibility research group. Among them are the chiefs of JPMorgan, Ameriprise, Wells Fargo and Goldman Sachs, according to As You Sow’s new report.
Between 1978 and 2018, inflation-adjusted CEO compensation soared 940%, according to the group. As You Sow used realized stock options in making its calculations and cited data from the Economic Policy Institute. The group also pointed to growing public sentiment that executive pay packages are skewed, citing the results of a Stanford University poll in which 86% of respondents said that they believe the chiefs of large, public U.S. firms take home outsized paychecks.
To calculate exactly how much "excess" pay each CEO earned, the advocacy group looked at chief executive comp packages for all S&P 500 companies, tapping data from Institutional Shareholder Services as well as from HIP Investor. The latter computed what each CEO would have earned if their pay were tied directly to cumulative total shareholder return over the previous five years. As You Sow also took into account the percentage of shareholders who voted against the pay package and the ratio of the chiefs’ pay to that of the median worker at their firm, the group says. Read Full Article - Financial Advisor IQ, March 9, 2020