- As You Sow has released its seventh annual report detailing the 100 most overpaid CEOs.
- The top 30 CEOs on the list includes Alphabet’s Sundar Pichai and Microsoft’s Satya Nadella.
- Nine companies have made the list every year, including Walt Disney, Goldman Sachs, and IBM.
- Visit the Business section of Insider for more stories.
CEOs like Alphabet’s Sundar Pichai and Microsoft’s Satya Nadella are among the top 100 most overpaid CEOs, according to a new report from As You Sow.
It’s no secret that CEOs of S&P 500 companies make good money. However, As You Sow’s list doesn’t rank by the size of a CEO’s salary. Instead, the corporate responsibility non-profit uses different metrics to identify whether or not a CEO is being overpaid.
To do this, the study took three main factors into account: the amount of extra dollars a CEO receives based on past company performance and pay, the number of shareholders who voted against a CEO’s pay package, and the ratio comparing the executive’s compensation to the company’s median employee pay. The latter was weighed less heavily.
Coincidentally, the highest salary on the list happens to belong to the most overpaid CEO: Alphabet’s Sundar Pichai, who receives a pay of $280,621,552, according to the report. To compare, the median pay of Alphabet workers sits at $258,708, which is a CEO to worker pay ratio of 1,085 to one.
Pichai is being paid an excess of $266,698,263, according to As You Sow.
Another tech giant, Microsoft, also made the list in 24th place. Satya Nadella, the head of Microsoft, earns $42,910,215. According to the study, Nadella is being paid an excess of $27,896,691.
The median pay of Microsoft’s employees is $172,512, which is a CEO to worker pay ratio of 249 to one.
Several social media companies are seen as giants in Silicon Valley, but only one was included in the report: Mark Zuckerberg, Facebook’s CEO, in 73rd place. Zuckerberg has a pay of $23,415,973, which, according to the study, contains an excess of $9,479,977.
To compare, the median employee pay at Facebook is $247,883. This amounts to a CEO to worker pay ratio of 94 to one, lower than both Microsoft and Alphabet’s.
However, the list wasn’t just dominated by tech leaders. Bob Iger, the former CEO of the Walt Disney Company, Lachlan Murdoch of Fox Corporation, and Miguel Patricio of the Kraft Heinz Company were all listed among the top 30 most overpaid CEOs.
And according to the study, companies that have consistently graced the list are performing worse than those that have never been mentioned. As You Sow has published this report annually since 2015, and nine CEOs have made the list every year, amounting to a total pay of $2 billion. However, these nine businesses have seen a lower annualized shareholder return compared to S&P 500 companies that have never made the overpaid CEO list.
These nine companies include: Discovery, Walt Disney, Comcast, AT&T, Goldman Sachs, IBM, McKesson, Ralph Lauren, and Regeneron.
This consistent overpaying of CEOs can signal several concerns, specifically “poor accountability, weak governance, and lack of concern for shareholder interests,” the study notes.
However, this overcompensation issue may soon be changing as more shareholders are beginning to vote against these hefty CEO paychecks, according to Rosanna Landis Weaver, the report’s author.
“We might be going into a spring where we see higher votes against pay, particularly at companies that try to insulate their executive compensation from the effects of the COVID-19 pandemic,” Weaver told Insider.
These were the top 30 most overpaid CEOs, according to As You Sow’s new report:
30. Norwegian Cruise Line – Frank Del Rio
Median worker pay: $16,925
29. Walgreens Boots Alliance – Stefano Pessina
Median worker pay: $34,074
28. HCA Healthcare – Samuel Hazen
Median worker pay: $56,012
27. Netflix – Reed Hastings
Median worker pay: $202,931
26. AT&T – Randall Stephenson
Median worker pay: $98,630
25. McKesson – John Hammergren
Median worker pay: $38,026
24. Microsoft – Satya Nadella
Median worker pay: $172,512
23. Linde – Stephen Angel
Median worker pay: $40,601
22. Coty – Pierre Laubies
Laubies was replaced halfway through 2020, the Wall Street Journal reported.
Median worker pay: $43,242
21. Mylan – Heather Bresch
Median worker pay: $43,367
20. Qualcomm – Steven Mollenkopf
Median worker pay: $90,259
19. Marathon Petroleum – Gary Heminger
Heminger retired from the company in April 2020.
Median worker pay: $27,507
18. General Electric – H. Lawrence Culp Jr.
Median worker pay: $50,471
17. Centene – Michael Neidorff
Median worker pay: $68,987
16. Activision Blizzard – Robert Kotick
Median worker pay: $94,308
15. Fiserv – Jeffrey Yabuki
Yabuki stepped as CEO mid-2020, Marketwatch reported.
Median worker pay: $65,254
14. Comcast – Brian Roberts
Median worker pay: $78,869
13. Fidelity National Information Services – Gary Norcross
Median worker pay: $59,235
12. T-Mobile – John Legere
Legere stepped down as T-Mobile’s CEO at the end of April 2020.
Median worker pay: $62,195
11. Advanced Micro Devices – Lisa Su
Median worker pay: $96,874
10. Fox Corporation – Lachlan Murdoch
Median worker pay: not provided
9. Las Vegas Sands Corporation – Sheldon Gary Adelson
Adelson died this year and was replaced by Robert Goldstein as CEO.
Median worker pay: $42,228
8. Universal Health Services – Alan Miller
Median worker pay: $38,931
7. Intel – Robert Swan
Swan was replaced by Pat Gelsinger as CEO of Intel this month.
Median worker pay: $96,300
6. The Kraft Heinz Company – Miguel Patricio
Median worker pay: $42,689
5. The Walt Disney Company – Bob Iger
Iger stepped down as CEO of the Walt Disney Company in February 2020.
Median worker pay: $52,184
4. Howmet Aerospace – John Plant
Median worker pay: $55,497
3. CVS Health – Larry Merlo
Merlo retired from his CEO post this month.
Median worker pay: $46,140
2. Discovery – David Zaslav
Median worker pay: $79,343
1. Alphabet – Sundar Pichai
Median worker pay: $258,708