Pandemic? What pandemic?
When it comes to executive compensation awards, increases continued in fiscal year 2020 as if the pandemic were not besieging the country, according to the 14th edition of the Equilar 200, published in partnership with The New York Times.
The report analyzes CEO pay among U.S. public companies with revenues of more than $1 billion.
Equilar explained in a statement that CEOs’ pay packages grew bigger in large part because compensation is awarded chiefly through equity, or the rights to earn shares of company stock either through continued service in the position (time-based) or by meeting unique, detailed benchmarks (performance-based).
According to the report, top earners on this year’s elite list often receive multi-year equity grants intended to pay out over an extended time period; 2020 was no different.
These awards are reported to the Securities and Exchange Commission as a total value based on the stock price on the date they are granted, regardless of the time horizon on which they may be earned.
In cases where a CEO is awarded such a pay package, he or she will rarely appear so high on the list in the subsequent edition, Equilar noted in a statement.
In other words, executive compensation reporting is mostly forward looking. This means that the pandemic’s ravages are unlikely to be reflected broadly in 2020 pay packages, especially among the largest companies.
See the gallery for the 15 highest paid CEOs in financial services.
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