2017 has been a good year for some CEOs - but a pretty painful one for others.
The Bureau of Labor Statistics reported that in 2016 the median salary for employees in America was $44,148 annually. This is the same as receiving $849 per week for 52 weeks of 40 hours work. It represents the amount of $21.23 per hour. Average wages increased 1.8% in 2016 compared to 2015.
That said, the inflation rate for 2016 affecting consumer goods showed an increase in prices of 2.1%. This means the actual buying power of wages earned in 2016 went down slightly because the average “raise” did not even match the cost of increasing prices.
Meanwhile, America’s privileged class of CEOs enjoyed an average raise of 8.5% for 2016 on salaries that are already at outrageous levels. The AFL-CIO says that for 2016 the average CEO-to-worker pay ratio was 347 to 1. Forbes reports that the CEOs of the 500 largest companies in America enjoyed a whopping average pay raise of 16%. That is just the overall average; some of the individual raises of these CEOs are even more shocking, including some increases of up to 400%.
Why do corporations pay CEOs such enormous amounts? Because they feel if they do not pay the big bucks to grab a highly-valued CEO, their competitors will. Some CEOs get raises even while the company under their guidance decreases in profitability and value.
Business Insider reported on May 25, 2017, the following salaries, with increases and decreases calculated for 2016, of the highest paid CEOs in America:
10 Steve Wynn - Wynn Resorts
$28.2 million salary paid, which included a 36% raise.
9 Leonard Schleifer - Regeneron Pharmaceuticals
$28.3 million salary paid, which included a 40% pay cut.
8 Ginni Rometty - IBM
$32.3 million salary paid, which included a 63% raise.
7 Jeff Bewkes - Time Warner Inc.
$32.6 million salary paid, which included a 3% raise.
6 Brian Roberts - Comcast Corp.
$33 million salary paid, which included a 9% pay cut.
5 Bobby Kotick - Activision Blizzard Inc.
$33.1 million salary paid, which included a 358% raise.
4 David Zaslav - Discovery Communications
$37.2 million salary, which included a 15% raise.
3 Bob Iger - Walt Disney Co.
$41 million salary paid, which included a 6% pay cut.
2 Les Moonves - CBS Corp.
$68.6 million salary paid, which included a 22% raise.
1 Tom Rutledge - Charter Communications
$98 million salary paid, which included a 499% raise.
WINNERS AND LOSERS
Business Insider also reported on the biggest winners and losers, in terms of the CEO’s percentage pay raise or pay cut, for 2016.
The biggest winners of pay raises for 2016 were:
1) Hock Tan - Broadcom
For 2016, Tan received a salary increase of 513%. He received $24.7 million in salary and bonuses for 2016.
2) Thomas Rutledge - Charter Communications
For 2016, Rutledge received a pay raise of 499%. He received $98 million in salary and bonuses for 2016.
3) Bobby Kotick - Activision Blizzard
For 2016, Kotick received a salary increase of 358%. He received $33.1 million in salary and bonuses for 2016.
The biggest losers who received pay cuts for 2016 were:
1) Dara Khosrowshahi - Expedia
For 2016, Khosrowshahi experienced a salary decrease of 97%, receiving $2.5 million in salary and bonuses. Don't feel too sorry for Dara; his pay for 2015 was $3.8 million in cash payments and $90.8 million worth of stocks and options. Expedia suffered unexpected poor performance under Dara’s management during 2016.
2) Brenton Saunders - Allergan
For 2016, Saunders experienced a salary decrease of 81%. He received $4.1 million in salary for 2016, compared to the $21.6 million he took home for 2015. The company failed to consummate a planned merger with Pfizer, which was blocked by the U.S. Treasury Department. This severely negatively impacted his bonus payment for M&A success.
3) Sandeep Mathrani - GGP
For 2016, Mathrani experienced a salary decrease of 68%. He received $12.7 million in salary for 2016, compared to the $39 million he took home for 2015. The extra pay he received for 2015 included a $20 million amount for restricted stock he received as a signing bonus, so his real salary decrease is actually only $6.3 million or about 33%. The GGP Company, which operates shopping malls, has shown decreased performance under Sandeep’s management.
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