Led by Gilead Sciences' CEO John Martin's nearly $170 million haul, 10 CEOs took in total compensation of over $60 million in 2013, according to USAToday's CEO Compensation Report. Along with cash compensation, USAToday analyzed the value of exercised options and vested stock.
CEO pay continued to rise last year amid a broader debate about income inequality and despite verbal shaming from presidents and pontiffs alike. But compensation critics are claiming a small win in the battle to rein in excessive pay: "A number of major U.S. companies are cutting back on glamorous luxuries like personal jet use, country-club memberships, and luxury rentals," Reuters reports.
Indeed, Wynn Resorts stopped paying for Steve Wynn's luxury Las Vegas villa in 2013 after previously shelling out over $450,000 per year to house its Chairman and CEO. At AT&T, CEO Randall Stephenson saw the value of his "other compensation" fall a whopping 35% in 2013, due largely to the company no longer allowing the executive access to its corporate jet for personal use.
But shed not a tear for Wynn whose overall compensation rose in 2013 to $19.6 million from $17.7 million in 2012, Reuters reports. As for Stephenson, his 2013 compensation topped $22 million, including over $522,000 in "other compensation"; again that's down 35% from the prior year.
When a drop to "only" $522,000 is considered a victory in the battle over executive compensation, that pretty much tells you all you need to know about who is winning the war.
And it's not even clear that compensation critics have won this minor skirmish. While payouts for egregious perks may be in decline, "in many cases the surging value of more mundane freebies like financial planning assistance or life insurance is more than making up the difference," Reuters reports.
What seems like outrageous pay for CEOs to the rest of us is indeed standard operating procedure for American corporations, as Henry Blodget and I discuss in the accompanying video.
"It's unbelievably piggish and outrageous," Henry says. "There's no way out other than a CEO saying 'you know what, I don't want to be a pig. I don't want to be paid 700 times my lowest employee.' That's the only thing that will stop it."
That's the only way because executive compensation is set by boards of directors, typically based on recommendations from compensation consultants. Both the consultants and board members -- often CEOs themselves -- have huge incentives to vote for higher pay, leading to an arms race among companies looking to attract and retain top managers.
"The consulting firms look around and says 'you don't want to be the cheap company that pays in the bottom half,'" Henry explains. "You've got to be in the top quartile. That jacks up the numbers for the [comparisons] next year. There is no end to it."
Indeed, a study by pay expert Graef Crystal concludes at least 99 companies in the S&P 500 underpaid their CEOs last year, Bloomberg reports. Among the "underpaid" executives was Bank of America CEO Brian Moynihan, whose 2013 compensation was a mere $13 million.
Of course, $13 million for one year seems like an incredible fortune to the average American but it's a mere pittance in the world of CEO pay.
But at least it's Friday and the Final Four is this weekend. Bread and circus, people. Bread and circus.