U.S. Markets close in 6 mins

CEOs Are Getting Paid Even More Than You Are Being Told

Say Contributor

Super-high CEO pay has been a hot topic of late, and a new report is shedding light on just how much business leaders are raking in. Sky’s the Limit? As we’ve discussed previously, the high salaries of CEOs have increasingly come under the microscope, with even Disney heiress Abigail Disney calling out the $35 million compensation package for CEO Bob Iger, saying that today’s CEOs “in general are paid far too much." But in news that might not surprise you, it turns out that the sky-high pay is even higher than many of us have been told. Stocking Up A new report in The Wall Street Journal shows how the final payment packages for CEOs are much bigger than the not exactly modest compensation plans that are often initially reported. The Journal compared what S&P 500 companies reported paying their CEOs over three years, which is known as “disclosed pay,” with what that final pay really added up to, aka “realizable pay.” What really boosts the package is that CEOs are very often given even more shares of a company if they hit certain goals, be it profitability or operational goals. When these shares, known as performance equity, are factored in, pay can rise as much as 16% to 25% above what is disclosed. Share and Share Alike Once performance equity was factored in, the $190 million that Oracle Corp. co-CEO Mark Hurd was promised over three years ended up valued at $535 million by the end, and the $53 million McDonald’s CEO Stephen Easterbrook was getting swelled to about $85 million. And Bob Iger? His reported $35 million turned out to be $65.7, once you look at the stock package. Mind the Gap Super-high pay tends to make CEOs easy targets for activists and politicians looking to criticize the ongoing income gap, and critics argue that some of the money that goes to CEO pay could go to employees and long term development, though high pay proponents argue these packages are necessary to attract top talent. (Remember that as a shareholder, you have a say in this!) Sometimes, a company doing well on the stock market can help boost a CEO’s pay, even if they didn’t meet their performance goals. -Michael Tedder Photo by Adobe