Corporate America’s CEOs are earning more than ever. According to a report in The Wall Street Journal, U.S. CEOs are taking bigger paychecks, placing compensation for corporate bosses on track for an all-time high amid a worker shortage fueling higher wages.
In 2021, the median pay for chief executives of companies in the S&P 500 index climbed to $14.2 million vs. $13.4 million year-over-year, as per the WSJ citing MyLogIQ data. In most instances, CEOs experienced a double-digit percentage increase in pay of at least 11%, while the compensation of one-third of the leaders ballooned by 25% or more.
Not everybody was in the higher pay camp, and some CEOs suffered pay drops. Close to 33% of the corporate bosses saw their pay slashed versus last year’s levels, while the pandemic caused some to forego a paycheck altogether.
Some of the top CEOs also have pay packages and stock options. The following are the released compensation packages for the CEOs of Discovery Inc., Amazon, and Intel Corporation.
Discovery Inc. CEO David Zaslav was the highest-paid CEO in the S&P 500 last year based on available information, with a salary of close to $247 million, including stock options. The median employee pay at the company in the same year was a drop in the bucket in comparison at almost $83,000.
Amazon CEO Andy Jassy earned close to $213 million, giving him the title of the second-highest paid chief executive among S&P 500 companies. Most of his compensation came in the way of restricted stock. Amazon employees earned an average salary of just under $33,000 last year.
Intel CEO Pat Gelsinger returned to leadership of the chip company last year. He secured a pay package of close to $179 million for a pay ratio of roughly 276:1 compared to the median Intel employee’s compensation.
While CEO pay is soaring, compensation for staff has also been on the rise, though to a lesser degree. The median employee paycheck increased as high as 3.1% last year in 50% of the companies included in the WSJ reported analysis. Staff at 33% of the companies experienced a drop in pay, comparable to the trend that emerged during the pandemic.
According to the U.S. Department of Labor, corporate America is in the midst of what is being called the Great Resignation. Over 4 million Americans left their jobs in January alone. The momentum from the resignation phenomenon carried over from 2021 when an all-time high of close to 48 million employees left for greener pastures.
Glassdoor Senior Economist Daniel Zhao tweeted that despite moderating, the “Great Resignation is still in full swing” as “quits” continue to hover “above pre-pandemic levels.”
Quits fell to 4.3 million in January, coming off of record highs in Nov. The Great Resignation is still in full swing even if quits are moderating somewhat. Quits are still up 23 percent above pre-pandemic levels.#JOLTS 4/ pic.twitter.com/oZdwfNHN5F
— Daniel Zhao (@DanielBZhao) March 9, 2022
The Harvard Business Review argues that the exodus from the workforce could be misleading. They point to the disruptions caused by the pandemic, saying they caused Americans to reassess their priorities and put them in the driver’s seat of their careers, choosing where and how they want to work and with whom.
Instead of a Great Resignation, the columnist refers to it as the “Great Aspiration,” which could result in the sprouting up of home-grown new businesses in “cottage industries.” However, some of those who left the workforce after the pandemic will decide not to rejoin.
Ironic that the critics of inflation do not site the increase in CEO and senior executive compensation for a major reason.