October 5, 2022

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Travelling Tomorrow

Pay packages for US CEOs hit record for sixth year in a row

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The pay packages of the top executives of the largest US corporations set another record in 2021, hitting a median value of $14.7 million. This was the tenth year in a row that median compensation increased and the sixth straight year of record setting packages for the chief executive officers (CEOs) of the top US companies.

CEO Tim Cook at the Apple retail store in downtown Los Angeles Thursday, June 24, 2021. (AP Photo/Damian Dovarganes)

According to a Wall Street Journal analysis published on Monday, total compensation of the CEOs of more than 400 companies on the S&P 500 rose by 12 percent in 2021. The Journal study also said that “most companies recorded annual shareholder returns of nearly 30 percent.”

Of the median total package value of $14.7 million, the analysis reports that $10.6 million consisted of equity awards, that is, non-cash compensation in the form of various company stock options. The balance of $4.1 million in the median CEO package was in the form of salaries, bonuses and other cash compensation.

In 2020, the median CEO package was worth $13.4 million, and the cash component was $3.1 million. In other words, while workers in nearly every US industry saw a reduction in real wages in 2021 due to an inflation rate of 7 percent, the cash portion of median CEO compensation increased by 32.3 percent.

As with everything related to the accumulation of vast sums of wealth in the upper echelons of American capitalist society, massive equity and cash compensation packages were awarded to a handful at the top end of the Journal rankings, and this exclusive club is growing. The analysis says, “Nine CEOs got pay packages worth at least $50 million last year—up from seven in 2020 and one in 2016.”

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