CEOs like Google's Sundar Pichai and Microsoft's Satya Nadella are among the most overpaid CEOs, according to a new report
REUTERS/Stephen Lam
- As You Sow has released its seventh annual report detailing the 100 most overpaid CEOs.
- The top 30 CEOs on the list includes Alphabet's Sundar Pichai and Microsoft's Satya Nadella.
- Nine companies have made the list every year, including Walt Disney, Goldman Sachs, and IBM.
- Visit the Business section of Insider for more stories.
CEOs like Alphabet's Sundar Pichai and Microsoft's Satya Nadella are among the top 100 most overpaid CEOs, according to a new report from As You Sow.
It's no secret that CEOs of S&P 500 companies make good money. However, As You Sow's list doesn't rank by the size of a CEO's salary. Instead, the corporate responsibility non-profit uses different metrics to identify whether or not a CEO is being overpaid.
To do this, the study took three main factors into account: the amount of extra dollars a CEO receives based on past company performance and pay, the number of shareholders who voted against a CEO's pay package, and the ratio comparing the executive's compensation to the company's median employee pay. The latter was weighed less heavily.
Coincidentally, the highest salary on the list happens to belong to the most overpaid CEO: Alphabet's Sundar Pichai, who receives a pay of $280,621,552, according to the report. To compare, the median pay of Alphabet workers sits at $258,708, which is a CEO to worker pay ratio of 1,085 to one.
Pichai is being paid an excess of $266,698,263, according to As You Sow.
Another tech giant, Microsoft, also made the list in 24th place. Satya Nadella, the head of Microsoft, earns $42,910,215. According to the study, Nadella is being paid an excess of $27,896,691.
The median pay of Microsoft's employees is $172,512, which is a CEO to worker pay ratio of 249 to one.
Several social media companies are seen as giants in Silicon Valley, but only one was included in the report: Mark Zuckerberg, Facebook's CEO, in 73rd place. Zuckerberg has a pay of $23,415,973, which, according to the study, contains an excess of $9,479,977.
To compare, the median employee pay at Facebook is $247,883. This amounts to a CEO to worker pay ratio of 94 to one, lower than both Microsoft and Alphabet's.
However, the list wasn't just dominated by tech leaders. Bob Iger, the former CEO of the Walt Disney Company, Lachlan Murdoch of Fox Corporation, and Miguel Patricio of the Kraft Heinz Company were all listed among the top 30 most overpaid CEOs.
And according to the study, companies that have consistently graced the list are performing worse than those that have never been mentioned. As You Sow has published this report annually since 2015, and nine CEOs have made the list every year, amounting to a total pay of $2 billion. However, these nine businesses have seen a lower annualized shareholder return compared to S&P 500 companies that have never made the overpaid CEO list.
These nine companies include: Discovery, Walt Disney, Comcast, AT&T, Goldman Sachs, IBM, McKesson, Ralph Lauren, and Regeneron.
This consistent overpaying of CEOs can signal several concerns, specifically "poor accountability, weak governance, and lack of concern for shareholder interests," the study notes.
However, this overcompensation issue may soon be changing as more shareholders are beginning to vote against these hefty CEO paychecks, according to Rosanna Landis Weaver, the report's author.
"We might be going into a spring where we see higher votes against pay, particularly at companies that try to insulate their executive compensation from the effects of the COVID-19 pandemic," Weaver told Insider.
These were the top 30 most overpaid CEOs, according to As You Sow's new report:
30. Norwegian Cruise Line - Frank Del Rio
Pay: $17,808,364
Excess: $6,617,002
Median worker pay: $16,925
29. Walgreens Boots Alliance - Stefano Pessina
Pay: $19,156,202
Excess: $7,266,357
Median worker pay: $34,074
28. HCA Healthcare - Samuel Hazen
Pay: $26,788,251
Excess: $14,094,249
Median worker pay: $56,012
27. Netflix - Reed Hastings
Pay: $38,577,129
Excess: $23,649,474
Median worker pay: $202,931
26. AT&T - Randall Stephenson
Pay: $32,032,925
Excess: $19,313,311
Median worker pay: $98,630
25. McKesson - John Hammergren
Pay: $17,400,207
Excess: $5,240,500
Median worker pay: $38,026
24. Microsoft - Satya Nadella
Pay: $42,910,215
Excess: $27,896,691
Median worker pay: $172,512
23. Linde - Stephen Angel
Pay: $66,149,325
Excess: $52,644,326
Median worker pay: $40,601
22. Coty - Pierre Laubies
Laubies was replaced halfway through 2020, the Wall Street Journal reported.
Pay: $16,211,992
Excess: $5,574,670
Median worker pay: $43,242
21. Mylan - Heather Bresch
Pay: $18,509,260
Excess: $7,524,895
Median worker pay: $43,367
20. Qualcomm - Steven Mollenkopf
Pay: $23,065,052
Excess: $9,744,629
Median worker pay: $90,259
19. Marathon Petroleum - Gary Heminger
Heminger retired from the company in April 2020.
Pay: $24,129,164
Excess: $11,768,410
Median worker pay: $27,507
18. General Electric - H. Lawrence Culp Jr.
Pay: $24,553,788
Excess: $13,339,908
Median worker pay: $50,471
17. Centene - Michael Neidorff
Pay: $26,438,425
Excess: $13,257,871
Median worker pay: $68,987
16. Activision Blizzard - Robert Kotick
Pay: $30,122,896
Excess: $15,867,848
Median worker pay: $94,308
15. Fiserv - Jeffrey Yabuki
Yabuki stepped as CEO mid-2020, Marketwatch reported.
Pay: $27,601,026
Excess: $13,842,124
Median worker pay: $65,254
14. Comcast - Brian Roberts
Pay: $36,370,183
Excess: $23,330,783
Median worker pay: $78,869
13. Fidelity National Information Services - Gary Norcross
Pay: $27,658,117
Excess: $13,926,647
Median worker pay: $59,235
12. T-Mobile - John Legere
Legere stepped down as T-Mobile's CEO at the end of April 2020.
Pay: $27,756,690
Excess: $13,798,277
Median worker pay: $62,195
11. Advanced Micro Devices - Lisa Su
Pay: $58,534,288
Excess: $40,542,122
Median worker pay: $96,874
10. Fox Corporation - Lachlan Murdoch
Pay: $42,111,103
Excess: $28,735,479
Median worker pay: not provided
9. Las Vegas Sands Corporation - Sheldon Gary Adelson
Adelson died this year and was replaced by Robert Goldstein as CEO.
Pay: $24,680,118
Excess: $11,976,674
Median worker pay: $42,228
8. Universal Health Services - Alan Miller
Pay: $24,473,240
Excess: $12,397,998
Median worker pay: $38,931
7. Intel - Robert Swan
Swan was replaced by Pat Gelsinger as CEO of Intel this month.
Pay: $66,935,100
Excess: $53,244,455
Median worker pay: $96,300
6. The Kraft Heinz Company - Miguel Patricio
Pay: $43,297,480
Excess: $31,390,609
Median worker pay: $42,689
5. The Walt Disney Company - Bob Iger
Iger stepped down as CEO of the Walt Disney Company in February 2020.
Pay: $47,517,762
Excess: $34,885,856
Median worker pay: $52,184
4. Howmet Aerospace - John Plant
Pay: $51,712,578
Excess: $39,321,473
Median worker pay: $55,497
3. CVS Health - Larry Merlo
Merlo retired from his CEO post this month.
Pay: $36,451,749
Excess: $24,311,079
Median worker pay: $46,140
2. Discovery - David Zaslav
Pay: $45,843,912
Excess: $33,823,935
Median worker pay: $79,343
1. Alphabet - Sundar Pichai
Pay: $280,621,552
Excess: $266,698,263
Median worker pay: $258,708
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