Amazon’s Andrew Jassy and Apple’s Tim Cook were No. 9 and No. 10 on the list with packages of $212.7 million and $98.7 million, respectivey, for 2021. As You Sow put their overpay amounts at, respectively, $197 million and $83 million.<\/p>\n
Jassy’s 2021 pay included a restricted stock award valued at $212 million that vests over 10 years. The compensation commitee said in the proxy it was “important to provide for clarity and stability through an award that is designed to establish a long-term owner’s perspective and encourage bold, long-term initiatives, in the same manner that Mr. Bezos’s shares as founder incentivized him to focus on long-term, expansive growth.” In a nod to the big number, it said the award “is intended to represent most of Jassy’s compensation for the coming years.” (Amazon founder Jeff Bezos stepped down as CEO in the summer of 2021.)<\/p>\n
Apple’s fiscal year ends September 30. For FY 2022, Cook took home $99.4 million, according to the latest proxy filed in January, similar to his pay for FY 2021. Apple’s compensation committee said it plans to slash Cook’s targeted pay by more than 40% in the current fiscal year, 2023, after “feedback” from displeased investors, the proxy said.<\/p>\n
Shareholder votes on pay are “advisory,” or non-binding, but too many votes against is not a good optic.<\/p>\n
Disney was No. 21 with former CEO Bob Chapek’s $32.4 million for fiscal 2021 considered an $18.2 million overpay. Disney’s fiscal year also ends in September. Chapek’s pay fell to $24 million for FY 2022. He exited in November, handing Bob Iger the reins.<\/p>\n
Netflix came in at No. 25 with co-CEOs Reed Hastings and Ted Sarandos earning combined compensation of $79 million — $64 million of that excess pay, according to As You Sow. In the streamer’s case, 77% of reported shares and 73% of institutional shares voted against. (In January, Hastings moved to executive chairman and COO Greg Peters was upped to co-CEO with Sarandos.)<\/p>\n
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The highest-paid CEOs and the most overpaid, the study noted, often have packages swelled by option grants. As WBD and other companies point out, these may only reflect grant date fair value with no assurance that value will ever be realized. Zaslav’s options, for instance, do require the stock to hit certain levels over a number of years before they’re in the money.<\/p>\n
However, repeated grants that vest or are cashed out over time are hard to track. They are not included in a proxy’s core compensation table because they were already counted when first awarded. <\/p>\n
Realized pay, when stocks and options are actually sold or vested “has historically been less visible and more difficult to calculate,” notes As You Sow. “Because of the extended bull market, most CEO pay stock awards have come to be worth much more than they were originally estimated to be.” Under new SEC rules, companies will also need to clarify totaly actual, or realized, pay.<\/p>\n
That’s one of a host of additions and changes to formulas the regulator is asking for around pay disclosure. A Pay Versus Performance table requires companies to include the relationship between compensation paid to the CEO and to other named executive officers, and to the company’s total shareholder return. It must include a company’s total shareholder return versus that of its peer group.<\/p>\n
Behind the ranking<\/strong><\/h2>\nTo generate its overpaid list, As You Sow has advisory firm HIP Investor analyze the financial performance of each S&P 500 company’s five-year total returns (total stock gains and losses, plus reinvested dividends). <\/p>\n
This year, its report breaks out Tesla as a case study of what it calls the weak links between company stock performance and CEO pay, in Tesla’s case a massive, multi-year option grant to founder and CEO Elon Musk that happens to be the subject of a lawsuit in Delaware court.<\/p>\n
“Instead of causing Musk to share the perspective of Tesla shareholders more closely, the awards financed his purchase of Twitter and his near continuous alienation” of shareholders, As You Sow said, with the stock losing about 65% of its value last year. It’s gained back ground this year.<\/p>\n
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