The Wall Street Journal's Annual CEO Pay Report
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What is the main topic discussed in this episode?
Your Money Briefing
Money and market stories from The Wall Street Journal. I'm J.R. Whelan in New York. Median CEO pay among the largest companies in the U.S. reached a new post-recession high last year.
What headline does The Wall Street Journal report about CEO pay for the largest U.S. companies?
So who topped the list and how high did women rank? We'll have details in a moment. First, these money headlines. U.S. producer prices, which are essentially the prices businesses charge for their goods and services, edged only slightly higher last month. That's a possible sign inflation in the economy remains relatively modest. The producer price index rose a seasonally adjusted 0.1% in April from a month earlier. Every time you click a link or post a photo, data is being marketed, so why shouldn't consumers get a cut of that money? An Australian startup and app maker called Unlocked thinks that consumers should receive rewards and other benefits.
Which CEOs and industries topped the pay list and who earned the most?
Google may disagree. Unlocked is suing Google and says that when Google threatened to remove it from the Google Play Store late in 2017, that was a step that would effectively kick it off the Android platform. The tech giant leveraged its overwhelming market dominance to choke off Unlocked's growth. And if you're planning a summer vacation, a trip to Europe could be the most friendly to your wallet. Wall Street Journal middle seat columnist Scott McCartney spoke with travel consultants who say that transatlantic capacity will be up this summer for the sixth straight year. There are about one-third more seats flying across the Atlantic since 2012, and that could mean airfare more than 40% cheaper to fly from New York to Barcelona over July 4th weekend compared with last year, and 20% cheaper into London.
You can check out Scott McCartney's full middle seat column at WSJ.com. This is your Money Briefing. from the Wall Street Journal. Welcome back, everybody. Median pay for CEOs of the biggest U.S. companies reached a new post-recession high of $12.1 million last year. It's all detailed in the Wall Street Journal's annual report on CEO pay, and reporter Tao Francis joins us to discuss the numbers. So, Tao, it was pharmaceutical, media, tech, and financial CEOs that led the pack last year, and some of those numbers are pretty staggering.
Among full-year CEOs, the single highest pay was for Hock Tan, the CEO of Broadcom.
How much of top CEO pay comes from stock awards versus salary?
He made $103 million, just a little over $103 million last year. Those industries tend to be among the highest paid in most years. Les Moonves, the CEO of CBS, came in second at $69.3 million. You had a number of people with pay over $30 million last year.
In those cases, is that a result of various forms of compensation?
For the most part, these big payouts that you're seeing are in the form of stock. The vast majority of these payments tend to be options or more commonly restricted stock and performance-related stock awards. So in a large part, these are awards that are going to make the CEOs even wealthier if the company's stock performs well.
What was also interesting is that there are more than two dozen CEOs on the list who made $5 million or less last year, the small potatoes, even though they are billionaires.
You often see this with founder CEOs. You know, they own a huge proportion of the company, or at least enough to make them billionaires several times over. People like Larry Page, who took pay of $1 a year both this year and last year. Warren Buffett, whose pay is routinely under half a million dollars. Of course, Jeff Bezos at Amazon also has pretty low pay this year, coming in at $1.7 million. So, you know, all of these people own quite a bit of the companies that they run.
Why do some billionaire founders show low annual CEO pay?
So they do well if the company does well, even if they don't get paid a lot each year.
So they're doing very well, even though they're not earning a lot of cash in salary during the year.
They're not just not earning a lot of cash. They're also not getting a lot of new stock. But that's OK, because the stock they own. becoming ever more valuable as the share price goes up.
Oh, I see. Okay. Now women also had a good showing on the list, especially those who have been on the job for more than a year.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:14
2
What headline does The Wall Street Journal report about CEO pay for the largest U.S. companies?
0:14–0:51
3
Which CEOs and industries topped the pay list and who earned the most?
0:51–2:16
4
How much of top CEO pay comes from stock awards versus salary?
2:16–3:46
5
Why do some billionaire founders show low annual CEO pay?
3:46–4:10
6
How did women CEOs rank on the pay list and who were the highest-paid?
4:10–5:32
7
Why are high shareholder returns sometimes paired with relatively low CEO pay?
5:32–7:00
8
What does new disclosure of median employee pay reveal about pay inequality across companies?
7:00–8:20
Speakers
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