Feb 27, 2020 - Economy & Business

CEO salaries are growing at an unprecedented pace

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Reproduced from As You Sow; Chart: Axios Visuals

CEO pay is growing at breakneck speeds even for top executives who aren't doing a very good job. In response to this trend of overvalued execs, social responsibility nonprofit As You Sow released its latest report on the most overpaid CEOs of S&P 500 companies.

What it means: The list is a calculation based on the chief executive's pay package, total shareholder return of the company during the previous year, and the pay relative to their company's average worker.

  • The rankings are decided by a statistical regression model from HIP Investor, which computes what the pay of each CEO would be if it was determined by cumulative total shareholder return (40%), data that ranks companies by what percent of shares were voted against the CEO pay package (40%), and CEO to worker pay ratio (20%).

The big picture: CEO pay has increased so greatly that even the bottom 10% of companies with the worst one-year shareholder returns had CEOs with median pay packages of $12.6 million, As You Sow found.

  • Between 1978 and 2018, inflation-adjusted CEO compensation based on realized stock options has increased 940%, according to data from the Economic Policy Institute.
  • The increase was 25% to 33% greater than the companies' stock market growth and almost 10 times greater than the 11.9% growth in a typical worker’s annual pay during that period.

Go deeper: Health care CEOs took home $2.6 billion in 2018

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Large pay packages rolling in for health care executives

Illustration: Sarah Grillo/Axios

New annual financial documents for large health care companies are rolling in with a familiar tune: executives took home large paydays in 2019 that mostly came from large stock gains.

The bottom line: The health care system is a firehose of spending, and a good chunk of that money always makes its way to the top.

Go deeperArrowMar 6, 2020 - Health

Women's woeful C-suite representation

Data: Fortune, author's calculations; Chart: Andrew Witherspoon/Axios

Less than 3% of CEOs of the world's largest companies are women. That's according to Fortune, whose annual Fortune Global 500 list featured just 14 female CEOs last year.

Why it matters: Stagnant numbers of female CEOs don't mean that nothing is happening. Rather, they mean that boards continue to perpetuate their biased hiring practices.

CEOs fill leadership void during coronavirus crisis

Illustration: Eniola Odetunde/Axios

Last year we discussed the emergence of CEOs becoming America's new politicians, stepping into the national leadership void on issues like climate change and immigration. Or, in some cases, being shoved into that void.

Driving the news: This role reversal has manifested itself over the past week, as so many of our elected officials dithered.