Nose Bleed CEO Pay During Pandemic Luck or Skill?

Anyone who’s played poker knows how much LUCK is a part of the game. So, it’s with curiosity over the GENIUS suggested in the WSJ’s “From Tesla to GE See How Much CEOs Made in 2020.” Couldn’t wait to be told: “Median pay reached $13.4 million for chief executive of the biggest U.S. companies…setting a 5th straight annual record…[and]…most S&P 500 CEOs got raises of about 5% or more as their companies recorded annual shareholder returns of about 8%.”

Ok. We get it. Despite the pandemic & lockdown craziness, corporate profits were generally up & so went CEO pay. Although I bet my best boxer shorts the average worker bee salaries did not go up 5% last year, but trailed in at a rate closer to 2%, if anything at all, e.g., you were laid off. The WSJ provides a chart showing worker as well as executive pay raises spanning 2012-2020 & the differential is about 25% in favor of you know who. But, I’d invite y’all to check your 2020 pay stubs & see what giant leaps you see in your case.

The real Q, again, may be how much of those CEO “rewards” are traceable to an executive’s acumen or sheer good fortune in being in the right place at the right time? Moreover, how many of these CEOs got salary boosts even when the profits weren’t so hot? Here, the paper analyzes the “highest” (winners) and “lowest” (losers) per company but concedes: “Most of the companies led by this year’s top earners are NOT typically in the pay stratosphere. Several reflect the winners of the pandemic & its economic turmoil.” Then, there’s the impossible to really tell bunch like Tesla’s Elon Musk who (ala Donald Trump) didn’t take a salary in 2020, but “raked in $32 billion in stock options…under his landmark 2018 pay package”. GE’s Larry Culp likewise got $100 million in “equity grants”. And, the list of CEOs getting mindboggling stock packages in addition to “salary” is too lengthy to repeat here. How many boxer shorts I could buy with Tesla’s options…

Davd Soul