CEO pay rose nearly 10% in 2024 as stock prices and profits soared

By MAE ANDERSON and PAUL HARLOFF Associated Press Business Writers NEW YORK AP The typical compensation package for chief executives who run companies in the S P jumped nearly in as the stock arena enjoyed another banner year and corporate profits rose sharply A large number of companies have heeded calls from shareholders to tie CEO compensation more closely to performance As a impact a large proportion of pay packages consist of stock awards which the CEO often can t cash in for years if at all unless the company meets certain targets typically a higher stock price or sphere value or improved operating profits The Associated Press CEO compensation survey which uses information analyzed for The AP by Equilar included pay content for executives at S P companies who have served at least two full consecutive fiscal years at their companies which filed proxy statements between Jan and April Here are the key takeaways from the survey A good year at the top The median pay package for CEOs rose to million up Meanwhile the median employee at companies in the survey earned reflecting a increase year over year CEOs had to confront sticky inflation and relatively high interest rates last year as well as declining consumer confidence But the market also provided particular tail winds Consumers kept spending despite their misgivings about the financial market inflation did subside somewhat the Fed lowered interest rates and the job field stayed strong FILE Tim Cook attends the WSJ Magazine Innovators Awards at the Museum of Modern Art on Tuesday Oct in New York Photo by Evan Agostini Invision AP File The stock domain s main benchmark the S P rose more than last year Profits for companies in the index rose more than was expected to be a strong year so the nearly increases are commensurate with the timing of the pay decisions revealed Dan Laddin a partner at Compensation Advisory Partners Sarah Anderson who directs the Global Business activity Project at the progressive Institute for Agenda Studies mentioned there have been a few current long-overdue increases in worker pay especially for those at the bottom of the wage scale But she revealed too a large number of workers in the world s richest countries still struggle to pay their bills The top earners Rick Smith the founder and CEO of Axon Enterprises topped the survey with a pay package valued at million Axon which makes Taser stun guns and body cameras saw revenue grow more than for three straight years and posted record annual net income of million in Axon s shares more than doubled last year after rising more than in Almost all of Smith s pay package consists of stock awards which he can only receive if the company meets targets tied to its stock price and operations for the period from to Companies are required to assign a value to the stock awards when they are granted Other top earners in the survey include Lawrence Culp CEO of what is now GE Aerospac e million Tim Cook at Apple million David Gitlin at Carrier Global million and Ted Sarandos at Netflix million The bulk of those pay packages consisted of stock or options awards FILE General Electric Co CEO Lawrence Culp Jr signs a billion deal by Emirates to purchase Boeing aircraft with GE engines at the Dubai Air Show in Dubai United Arab Emirates Monday Nov AP Photo Lujain Jo The median stock award rose almost last year compared to a increase in base salaries according to Equilar For CEOs target long-term incentives consistently increase more each year than salaries or bonuses commented Melissa Burek also a partner at Compensation Advisory Partners Given the critical role that long-term incentives play in executive pay this trend makes sense Jackie Cook at Morningstar Sustainalytics stated the benefit of tying CEO pay to performance is that share-based pay appears to provide a clear area signal that greater part shareholders care about But she notes that the greater use of share-based pay has led to a phenomenal rise in CEO compensation tracking up-to-date years field performance which has widened the pay gap within workplaces Specific well-known billionaire CEOs are low in the AP survey Warren Buffett s compensation was valued at about five times what a worker at Berkshire Hathaway makes According to Tesla s proxy Elon Musk received no compensation for but in he was awarded a multiyear package that has been valued at billion and is the subject of a court battle Other notable CEOs didn t meet the criteria for inclusion the survey Starbucks Brian Niccol received a pay package valued at million but he only took over as CEO on Sept Nvidia s Jensen Huang saw his compensation grow to million but the company filed its proxy after April The pay gap At half the companies in AP s annual pay survey it would take the worker at the middle of the company s pay scale years to make what the CEO did in one Companies have been required to disclose this so-called pay ratio since Related Articles In the current era in History May Hillary and Norgay first to summit Mount Everest Trump commutes federal life sentence of founding Gangster Disciples kingpin Larry Hoover Officers blast cancelation of circumstances grants in Chelsea Everett Stylist says Cassie confided that Sean Diddy Combs pressured her into sex marathons Trump pauses new Russia sanctions The pay ratio tends to be highest at companies in industries where wages are typically low For instance at cruise line company Carnival Corp its CEO earned nearly times the median pay of for its workers McDonald s CEO makes about times what a worker making the company s median pay does Both companies have operations that span numerous countries Overall wages and benefits netted by private-sector workers in the U S rose through according to the Labor Department The average worker in the U S makes a year That figure rises to when benefits such as robustness care and other insurance are included With CEO pay continuing to climb we still have an enormous obstacle with excessive pay gaps Anderson commented These huge disparities are not only unfair to lower-level workers who are making notable contributions to company value they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates A few gains for female CEOs For the women who made the AP survey the highest number dating back to median pay rose to million That compares to a increase to million for their male counterparts The highest earner among female CEOs was Judith Marks of Otis Worldwide with a pay package valued at million The company known for its elevators and escalators has had operating profit above billion for four straight years About million of Marks compensations was in the form of stock awards This photo provided by Otis Elevator Co shows CEO Judy Marks via AP Other top earners among female CEOs were Jane Fraser of Citigroup million Lisa Su of Advanced Micro Devices million Mary Barra at General Motors million and Laura Alber at Williams-Sonoma million Christy Glass a professor of sociology at Utah State University who studies equity inclusion and leadership mentioned while there may be a insufficient more women on the top paid CEO list overall equity trends are stagnating particularly as companies cut back on DEI programs There are maybe a couple more names on the list but we re really not moving the needle significantly she commented Prioritizing safety Equilar discovered that a larger number of companies are offering protection perquisites as part of executive compensation packages possibly in reaction to the December shooting of UnitedHealthCare CEO Brian Thompson Equilar explained an analysis of companies in the S P that filed proxy statements by April proved that the median spending on safety rose to last year from in Among the companies that increased their prevention perks were Centene which provides wellness care services to Medicare and Medicaid and the chipmaker Intel Reporters Matt Ott and Chris Rugaber in Washington contributed