Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Worst-paying blue chip employers bolstered CEO pay in pandemic, report says

Stock MarketsMay 11, 2021 17:25
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A delivery staff member wearing a protective mask enters a KFC fast food outlet after a delivery, amid concerns about the spread of the coronavirus disease (COVID-19), in Colombo, Sri Lanka, July 9, 2020. REUTERS/Dinuka Liyanawatt

By Jessica DiNapoli

NEW YORK (Reuters) -More than half of 100 companies with the lowest median employee wages in the S&P 500 Index boosted CEO pay by changing the rules for assessing executive performance during the COVID-19 pandemic, according to a report by a left-leaning policy group published on Tuesday.

The report from the Institute for Policy Studies found that 51 of these 100 companies, including beverage and snack maker Coca-Cola (NYSE:KO) Co, cruise ship operator Carnival Corp (LON:CCL) and fast food corporation Yum Brands Inc, reduced median worker pay by 2% to $28,187 on average in 2020 compared to 2019, even as the median compensation for their CEOs rose 29% to $15.3 million.

The findings offer ammunition to investors opposing executive compensation hikes in non-binding votes held at the annual shareholder meetings of companies. More companies are facing shareholder backlash against their CEO pay this year than last, Reuters has reported.

The companies studied in the report bolstered executive compensation by lowering performance targets, giving retention bonuses and swapping out stock awards linked to financial results with time-based share grants, the report found.

Carnival (NYSE:CCL) awarded CEO Arnold Donald special retention and performance-based stock awards valued at $5.2 million last August, according to a securities filing.

A Carnival spokesman said in an email that, despite the awards, Donald received no cash bonus in 2020 and his total compensation in the last year was down 29% versus 2019.

A Coke spokesperson referred comment to the company's proxy statement, which notes that roughly 1,000 employees received special share awards, in addition to executives.

"We can't rely on corporate boards to fix the problem of excessive CEO compensation," Sarah Anderson, a co-author of the report, said in an interview. Anderson suggested in the report that companies with the highest CEO-to-average worker pay ratios should be taxed more.

The CEO-to-average worker pay ratio for the 51 companies in the report was 830-to-1.

The Yum Brands board authorized discretionary adjustments to bonus programs resulting in a $1.4 million bonus for CEO David Gibbs he otherwise would not have received, according to a securities filing. He also received a one-time stock award of $882,127, for a total 2020 compensation of $14.6 million, according to the filing.

The company's board said the compensation boost was appropriate given that Gibbs and other executives helped stabilize the business and positioned it for success coming out of the pandemic.

In a prepared statement, Yum Brands said Gibbs gave up his base salary and used it to help fund one-time $1,000 bonuses for nearly 1,200 restaurant general managers. The company also awarded special bonuses to team members in company-owned restaurants globally.

Yum Brands identified a part-time worker at its fast food chicken chain KFC as its median employee, with a total compensation of $11,377, in the filing.

Worst-paying blue chip employers bolstered CEO pay in pandemic, report says
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email