We did the math to calculate how many hours it took Bob Iger to make what his workers earned in one year when he ran Disney
Disney CEO Bob Iger just stepped down, and while it's not surprising that CEOs like him make a lot more money than their employees, the massive extent of that pay gap can sometimes be overlooked. US companies are required to publish their chief executives' annual compensation, as well as the ratio of that compensation to the annual pay of the company's median employee. Using those ratios, we calculated how long it took CEOs at 19 of the biggest companies in the US to make what at typical employee earned in a year. Several CEOs, including Iger and Starbucks CEO Kevin Johnson, took less than a day to make a typical employee's annual salary. Visit Business Insider's homepage for more stories.
Disney CEO Bob Iger just stepped down, and it's no surprise that chief executives like him make a lot more than the workers they oversee. We took a look at just how big that gap is at some of America's biggest corporations. One of the provisions of the post-financial-crisis Dodd-Frank reform bill requires corporations to disclose the ratio of their CEO's pay to that of the median employee at the company. Using those pay ratios, we calculated how long it would take the CEOs of big US companies to make what the median employee earned in a year. So far, 19 of the 100 largest corporations in the S&P 500 as measured by their market capitalizations have filed their CEO compensation figures and pay ratios for the 2019 fiscal year. More companies will follow over the next several months. The gap between what a CEO makes and what a typical employee makes varies widely from company to company. Nvidia CEO Jen-Hsun Huang had a total compensation 88 times larger than the typical employee at his company, meaning it took him a little over four days to earn the median employee's annual salary. Meanwhile, Walmart CEO Doug McMillon made 1,076 times what the typical Walmart worker made, and thus earned a median Walmart employee's annual salary in just eight hours. As with any discussion of executive compensation, it's worth noting that pay for people at the top is a bit more complicated than just getting a biweekly direct deposit. Many CEOs receive the bulk of their compensation in the form of equity in the companies they run, and so they may not realize the full value of their pay as reported to the SEC for years. Here's the full list, along with the CEOs' fiscal year 2019 compensation, median employee pay, and the CEO to median worker pay ratio:SEE ALSO: 6 charts that show how much more wealth the 1% have over everyone else 19. Oracle co-CEO Safra Katz took 30 days and 10 hours to earn what a typical employee did in a year.
CEO compensation: $965,981 Typical employee salary: $83,813 Ratio: 12:1 Oracle's other co-CEO Mark Hurd died in October 2019. 18. Nvidia CEO Jen-Hsun Huang took 4 days and 4 hours to earn what a typical employee made in a year.
CEO compensation: $13,642,838 Typical employee salary: $155,035 Ratio: 88:1 17. Intuit CEO Sasan Goodarzi took 3 days and 5 hours to earn what a typical employee made in a year.
CEO compensation: $17,933,345 Typical employee salary: $157,232 Ratio: 114:1 Intuit noted in their proxy statement that Goodarzi's compensation reflects annualized pay. 16. Costco CEO W. Craig Jelinek took 2 days and 4 hours to earn what a typical employee made in a year.
CEO compensation: $8,016,200 Typical employee salary: $47,312 Ratio: 169:1 15. Visa CEO Alfred F. Kelly Jr. took 2 days and 4 hours to earn what a typical employee made in a year.
CEO compensation: $24,265,771 Typical employee salary: $142,494 Ratio: 170:1 14. Cisco Systems CEO Chuck Robbins took 2 days to earn what a typical employee made in a year.
CEO compensation: $25,829,833 Typical employee salary: $142,593 Ratio: 181:1 13. Salesforce co-CEO Marc Benioff took 1 day and 23 hours to earn what a typical employee made in a year.
CEO compensation: $28,391,846 Typical employee salary: $151,955 Ratio: 187:1 Salesforce's other co-CEO Keith Block made $16,961,156 in 2019, meaning it took him 3 days, 6 hours to make what a typical employee did in a year. He stepped down from the role in February 2020. 12. Apple CEO Tim Cook took 1 day and 20 hours to earn what a typical employee made in a year.
CEO compensation: $11,555,466 Typical employee salary: $57,596 Ratio: 201:1 11. Medtronic CEO Omar Ishrak took 1 day and 13 hours to earn what a typical employee made in a year.
CEO compensation: $17,796,325 Typical employee salary: $74,206 Ratio: 240:1 10. Microsoft CEO Satya Nadella took 1 day and 11 hours to earn what a typical employee made in a year.
CEO compensation: $42,910,215 Typical employee salary: $172,512 Ratio: 249:1 9. Qualcomm CEO Steve Mollenkopf took 1 day and 10 hours to earn what a typical employee made in a year.
CEO compensation: $23,065,052 Typical employee salary: $90,259 Ratio: 256:1 8. ADP CEO Carlos Rodriguez took 1 day and 5 hours to earn what a typical employee made in a year.
CEO compensation: $19,000,187 Typical employee salary: $63,225 Ratio: 301:1 7. Former Nike CEO Mark G. Parker took 15 hours and 56 minutes to earn what a typical employee made in a year.
CEO compensation: $13,968,022 Typical employee salary: $25,386 Ratio: 550:1 Note: Parker stepped down as Nike CEO in January 2020 and was succeeded by John Donahoe. 6. Estée Lauder CEO Fabrizio Freda took 12 hours and 34 minutes to earn what a typical employee made in a year.
CEO compensation: $21,435,428 Typical employee salary: $30,733 Ratio: 697:1 5. Former Accenture Interim CEO David P. Rowland took 10 hours and 43 minutes to earn what a typical employee made in a year.
CEO compensation: $15,031,875 Typical employee salary: $18,392 Ratio: 817:1 Note: Rowland stepped down as CEO in September 2019 and was succeeded by Julie Sweet. Accenture also provided an alternate estimate of the CEO pay ratio based on a cost-of-living adjustment, as their median employee was based in India. Using that estimate, the ratio was 298:1, and Rowland would have made what the median employee did in 1 day, 5 hours. 4. Former Disney CEO Bob Iger took 9 hours and 37 minutes to earn what a typical employee made in a year.
CEO compensation: $47,517,762 Typical employee salary: $52,184 Ratio: 911:1 3. Walmart CEO Doug McMillon took 8 hours and 8 minutes to earn what a typical employee made in a year.
CEO compensation: $23,618,233 Typical employee salary: $21,952 Ratio: 1,076:1 2. TJX CEO Ernie Herrman took 5 hours and 29 minutes to earn what a typical employee made in a year.
CEO compensation: $18,822,770 Typical employee salary: $11,791 Ratio: 1,596:1 1. Starbucks CEO Kevin Johnson took 5 hours and 14 minutes to earn what a typical employee made in a year.
CEO compensation: $19,241,950 Typical employee salary: $11,489 Ratio: 1,675:1
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Gannett's CEO is about to make big cuts to America's newspapers and he won't have to disclose how much he gets paid for it — despite helming a public company
Gannett CEO Mike Reed has been tasked with drawing up as much as $300 million of...Gannett CEO Mike Reed has been tasked with drawing up as much as $300 million of cost cuts to America's largest newspaper publisher after a merger last year brought the USA Today publisher and a large local newspaper chain under the same roof. His assignment, which will inevitably lead to people losing their jobs, may not be the most enviable role in the news industry today. But thanks to an arrangement with a private equity firm, Reed's own compensation will stay shielded from the public — and his own employees — as he takes an ax to the business. And that's despite Gannett being a public company. Business Insider took a look at the deal that granted Reed such anonymity, which traces back to 2013, when he became CEO of the media investment firm that acquired Gannett, called New Media Investment Group. The compensation is a byproduct of an uncommon management structure at public companies where a CEO is employed by an outside manager, rather than as a full-time employee of the company itself, according to corporate attorneys and Wall Street executives. In 2018, an adviser to shareholders of public companies in proxy votes, Institutional Shareholder Services, found about 90 U.S. public companies that were externally managed. That's compared to more than 3,400 publicly listed U.S. companies overall that year. Click here for more BI Prime stories. Mike Reed is the CEO of Gannett, the largest U.S. newspaper publisher, and is planning layoffs as part of up to $300 million in anticipated cuts on the back of a huge merger with local newspaper owner New Media. He's met with local newsrooms and answered questions about upcoming changes, telling The Tennessean, for instance, that he expects to make many cuts by the first half of February, according to a recent report by Poynter. One thing he hasn't talked much about, though, is his own compensation, which is, thanks to an arrangement with a private equity firm, entirely shielded from the public eye — despite Gannett being a public company. His pay contract, a carryover from his six-year tenure as CEO of New Media — a media investment firm created by private equity shop Fortress — offers a glance at how private equity can in rare instances be responsible for the compensation of CEOs at public companies on an ongoing basis. Although it is not common, the contract presents a data point about private equity firms' influence in corporate America, at a time when politicians such as presidential candidate Elizabeth Warren scrutinize how their management strategies affect business and society. Business Insider delved into Reed's pay arrangement shortly after he was named CEO of Gannett in November, reviewing SEC filings, speaking with corporate attorneys, Wall Street bankers and people close to the newspaper deal. The findings turned up multiple instances where CEO compensation was not disclosed at a public company because of the involvement of an outside manager. Meanwhile, the deal terms in the New Media/Gannett merger call for Fortress to stop managing the newspaper publisher in two years. At that point, Reed — or whoever is CEO at that time — would no longer be employed by Fortress, the merger agreement said. Until then, though, and as Reed sets out to make critical changes to the newspaper business, his employment contract with Fortress remains, though the private equity firm has agreed to reduce the fees it earns from managing the company overall. Through a spokesman, Reed declined to comment for this article. So did Fortress. Reed's history with Fortress Reed's employment with Fortress traces at least as far back as his role as CEO of New Media Investment Group, which the firm spun out in 2013. During Reed's tenure, he worked on its board with Fortress's billionaire CEO Wes Edens — who co-owns the Milwaukee Bucks — and managed New Media's expanding list of local newspapers under its operating division, GateHouse, which owned and operated papers throughout New England, Ohio, Texas and other parts of the country. Yet each year, as New Media reported its annual proxy statement with the Securities and Exchange Commission, it excluded Reed's compensation where public companies normally disclose CEO pay. Instead, New Media explained that Reed was an employee of Fortress, rather than the media investment firm itself, so his compensation would remain private — "a loophole in securities law," as one person familiar with the matter referred to it. People familiar with the arrangement said it was completely legal and in-line with SEC disclosure requirements since Reed was paid by a third-party, Fortress, rather than the company he was managing, New Media. Indeed, similar so-called "externally managed" structures have also been used at other public companies, like National Beverage Corporation, which distributes La Croix, the sparkling water beverage. Externally managed companies Such instances where a company is externally managed by the CEO of an outside management services firm, rather than a full-time employee of the company itself, are not common but there is some precedent, according to corporate attorneys and Wall Street executives. In 2018, an adviser to shareholders of public companies in proxy votes, Institutional Shareholder Services, found about 90 U.S. public companies that were externally managed. That's compared to more than 3,400 publicly listed U.S. companies overall that year, according to a finance industry report by The Carlyle Group. Within that 90-company sample size, most were real estate investment trusts, or REITs, according to ISS. Experts told Business Insider that the externally managed structure can fuel investor concerns about potential conflicts of interest — when it comes to M&A, for instance, given PE firms' ownership of other companies. This became an issue for Fortress in at least one other investment with an external management structure that did not disclose a CEO's compensation. In 2014, Fortress spun off a publicly-traded investment firm called New Senior. The following year it bought 28 senior living home properties for $640 million. Afterward, shareholder John Cumming sued New Senior CEO, Edens, and Fortress, pointing to the fact that the properties were owned by one of Fortress's own private equity funds, and claiming New Senior had overpaid in a deal that was full of conflicts of interest. Fortress initially fought the lawsuit but paid $53 million to settle last year. At New Media, however, Business Insider found no similar investor lawsuits related to its management structure, according to a search of federal court records. 'Various services' performed Of the externally managed companies ISS found in 2018, many did not disclose CEO compensation details, according to ISS's head of US compensation research, David Kokell. The disclosure of CEO compensation — not just the amount, but also performance metrics — is important because it can show whether the CEO is working in a company's best interests, rather than in the interests of a third party, Kokell said. "Without the disclosure, you can't really evaluate that," he said. In the case of New Media, the company did not lay out Reed's performance metrics in SEC filings, though in a sign that he is invested in the company's future, he bought 280,000 shares of Gannett in November, shortly after the merger. The explanation Language in proxy statements filed by New Media and New Senior show how Fortress explains why it does not disclose the CEO compensation. In addressing Reed's 2018 compensation in an April 2019 proxy statement, New Media said that Reed "devoted a substantial portion of his time to the company ... although he did not exclusively provide services to us." It said that Fortress compensated Reed "based on the overall value of the various services" he performed to the private equity firm, and that it was "not able to segregate and identify any portion of the compensation awarded to him as relating solely to service performed for us." Reed did not respond to a request for comment about what other services he performed for Fortress, if not his service of managing New Media as CEO. Overall, SEC filings show Fortress charged New Media management and incentive fees at a clip of $24 million a year including expenses, in the lead-up to its merger with Gannett. 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Microsoft CEO Satya Nadella made $42.9 million in its last fiscal year — up 65% from the year before
Microsoft CEO Satya Nadella's pay during the company's most recent fiscal year is up 65 percent...Microsoft CEO Satya Nadella's pay during the company's most recent fiscal year is up 65 percent to $42.9 million. A big part of Nadella's higher compensation includes stock awards related to Microsoft's increasing market cap. Nadella made 249 times more than the company's median employee in fiscal year 2019. Visit Business Insider's homepage for more stories. Microsoft CEO Satya Nadella brought in some $42.9 million in total pay in the company's 2019 fiscal year — that's up about 65% from the year before. Part of that, Microsoft said in a proxy statement announcing his pay package, is due to a simple raise, which the company credits to his performance as chief executive since taking over in 2014. His base salary went from $1.5 million up to $2,333,333, and his overall potential cash and equity bonuses jumped up, too. However, a big part of that pay package comes from the partial vesting of a one-time, performance-based stock option award that Nadella was granted when he first took the job. Basically, because Microsoft's market cap has gone up by over $500 billion on his five-year watch, and because its shareholder returns compare favorably to the S&P 500 index, Nadella unlocked the maximum award for this 5-year period of 900,000 additional shares. All told, Microsoft granted Nadella $29.6 million in stock awards over the year, and $10.8 million in cash, all on top of his regular salary, to reach that $42.9 million figure. Microsoft Chief Financial Officer Amy Hood's 2019 compensation reached nearly $20.3 million, up about 35 percent from last year, including more than $19.1 million in stock awards and incentives. She was the company's second-highest-paid executive for the year. President and Chief Legal Officer Brad Smith brought in almost $17.4 million, up nearly 29 percent from fiscal year 2018. Compensation for Smith and Nadella included $100,000 each in charitable gift matches. Nadella's fiscal year 2019 compensation was 249 times more than Microsoft's median employee, which the company said made $172,512 in the same period. Microsoft announced in September longtime board members Charles H. Noski, former AT&T and Bank of America vice chairman, and Helmut Panke, former chairman of the board of management at BMW, will not seek reelection. GlaxoSmithKline CEO Emma Walmsley has been nominated to the company's board.Join the conversation about this story » NOW WATCH: What El Chapo is really like, according to the wife of one his closest henchman