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Data: Axios analysis of Securities and Exchange Commission filings. Chart: Andrew Witherspoon, Kerrie Vila, Lazaro Gamio/Axios

The CEOs running S&P 500 companies cumulatively took home $10 billion in 2017, an amount that is 44% higher than what is usually reported, according to an Axios analysis of Securities and Exchange Commission filings. The big reason: CEOs cashing in their stock.

Why it matters: Annual proxy filings bury the fact that many of America's top executives are sometimes paid even more than what headlines suggest, due almost entirely to the huge gains they reap from the stock market. Meanwhile, worker wages are stagnant, the average household is living on $59,000 a year, and income inequality has become one of the most visible political rallying cries.

Be smart: The massive executive paydays made sense, in that 2017 was a strong year for stocks. Higher stock prices equal more lucrative payouts, especially if executives have been holding onto options for several years. In other words, some CEOs could have taken home less than the headline number in prior years.

  • Company spokespeople said the compensation reflects "positive performance."

This analysis covers total CEO compensation (salary, bonuses, stock, perks and pension/health benefits) based on 2017 proxy documents that companies file annually with the SEC.

  • We calculated the actual realized gains (ARG) of CEOs' stock options and awards — shares that were actually exercised and taxed — versus the estimated fair value (EFV) of their stock that predicts future stock value and is prominently featured in the summary compensation tables of SEC filings.
  • We did this because EFV of stock does not accurately depict how much someone made in a given year.
  • ARG is reported in each company's annual proxy filing. But the numbers are usually buried, and they're in bits and pieces, so they require extra steps to calculate.
  • Our analysis reflects companies that were in the S&P 500 index as of June 1, 2018, and covered people who were CEOs for the majority of 2017. It also includes median employee compensation figures and ratios that compare CEO and median employee pay.
  • Matthew Hopkins, a senior researcher at the nonprofit Academic-Industry Research Network who has studied corporate compensation, reviewed the analysis for accuracy.
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Data: Axios analysis of Securities and Exchange Commission filings. Chart: Andrew Witherspoon, Kerrie Vila, Lazaro Gamio/Axios

The big picture: CEOs made a lot more than what is normally portrayed in most media coverage.

  • S&P 500 CEOs cumulatively made more than $10 billion in 2017 after calculating ARG — an amount that exceeds the total economic output of countries like Eritrea — and median CEO pay hovered around $13 million.
  • That compares to about $7 billion of compensation and a median of $12 million based on EFV.
  • Compensation based on ARG was higher than the EFV 53% of the time. ARG was lower if a new CEO didn't exercise stock, or if the company's stock price declined.
  • Nine CEOs made more than $100 million last year under our calculations, compared with just two CEOs under standard rules. Many other prominent executives who aren't CEOs, like Oracle's Larry Ellison and Facebook's Sheryl Sandberg, also took home at least nine figures last year based on ARG. Oracle and Facebook did not comment.
  • Netflix CEO Reed Hastings earned the most in 2017 under these calculations: $179 million, compared with the $24.4 million that was prominently reported in Netflix's annual filing. Netflix declined to comment.

Go deeper: Filtering the data by industry shows where some executives benefited more.

  • CEOs in the tech, finance and health care industries often made a lot more in real dollars than what was normally reported.
  • Conversely, CEOs running energy and utility companies had lower total compensation than was reported because of lagging stock prices.

Listen to Bob Herman discuss his story on Dan Primack's Axios Pro Rata podcast. And subscribe to the podcast here.

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