The 2021 in which the western economies came out of the most severe phase of the pandemic thanks to the vaccination campaigns had an effect on salaries. But not for everyone. The CEOs benefited from the rebound in the financial markets. The compensation of CEOs of major American companies rose to a new record in 2021, flying on average to 14.7 million, an increase of at least 12 percent. This was revealed by an analysis by the Wall Street Journal, based on data from MyLogIQ. It shows that Expedia’s number one, Peter Kern, is the highest paid of all, with a total salary of $ 296 million, most of which in equities. In second place David Zaslav of Discovery with 246 million, followed by Bill McDermott of ServiceNow. Jamie Dimon of JP Morgan and Tim Cook of Apple complete the top five. But the increases are rife across the board.
Never paid so much. Last year was one of the highest paying for Wall Street listed companies. Accomplices stock prices, from the S&P 500 to the Dow Jones, passing through the Nasdaq, to beat the all-time highs every day, the remuneration committees of the companies listed on Wall Street have been able to do little. The remuneration, usually a fixed part that does not exceed 40% of the total and a variable part, being based on performance, could not fail to be immune from noteworthy increases. More value for stakeholders, more compensation for CEOs. In 2021, the median salary, bonus and other cash compensation for the 400 CEOs of the companies surveyed was $ 4.1 million. In 2020, the median compensation package was $ 13.4 million for the same companies, with an average cash compensation of $ 3.1 million.
In the analysis of the WSJ, the concentration of remuneration and the increasing packages are striking. Nine CEOs received salary packages worth at least $ 50 million last year, up from seven in 2020 and one in 2016. About two-thirds of the CEO’s compensation comes in the form of stock or stock option awards. which generally mature over several years. For the 25 highest-paid CEOs, each of whom exceeded $ 35 million, equity represented 78% of the total compensation. Once again, the highest paid CEOs have focused on the technology and media sectors. That is the securities listed on the Nasdaq, which from the beginning of the year to today has entered a phase that is increasingly taking on the contours of a bearish trend. The Wall Street tech list has left over 24% on the ground from January 1st to today. And the monetary policy decisions of the Federal Reserve, which raised rates in March (25 basis points) and May (50 basis points), will be decisive in the portfolio choices of institutional investors and individual savers.
If the current trend consolidates, there will be a rotation from stocks to bonds that has not occurred in years. The greatest cost will be affected by the stock market prices of the securities most affected by the positions taken. Among them, that Big Tech that so far has given satisfaction to multiple CEOs of Wall Street. But that already starting this year, between the war in Ukraine, inflation beyond the estimates, the food crisis at the gates, could experience a decline. The first since 2012, the first for ten years. Considering the multi-year remuneration schemes, and the amounts accumulated over the last decade, for many CEOs the landing towards the new regime can be expected to be rather soft.