According to a new study, CEO pay went up by 15.7% last year, mostly because of big bonuses paid out as companies got back on their feet after the pandemic.
The survey from the consulting firm Willis Towers Watson found that CEO salaries went up by 2% in 2021, but bonuses went up by an average of 39.5% compared to the year before, when CEO bonuses went down by 6.1 %.
The analysis is based on the salaries that 500 CEOs in the S&P 1500 have made public.
Don Delves, North America practise leader of Executive Compensation at WTW, said, “The fact that CEO pay went up in a year when revenue growth, earnings, and return to shareholders were all strong shows that CEOs are being rewarded for performance.”
“Last year was a comeback year for CEO pay, and many companies and shareholders did well financially.”
Still, as the pandemic gets better, CEO has become a hot topic again.
Early this year, the shareholder advisory firm Glass Lewis said that Goldman Sachs’ plan to give CEO David Solomon a $30 million one-time bonus and COO John Waldron a $20 million bonus was “too much.”
The proxy firm told Goldman shareholders that they shouldn’t vote for the pay package for executives that includes the one-time gift bonuses. The challenge didn’t work out.
In the same way, Glass Lewis told shareholders to turn down the $52.6 million bonus that JPMorgan CEO Jamie Dimon will get if he stays on for five more years.
Only 31% of shareholders agreed that Dimon should get the huge payout of stock options. But votes on pay are only suggestions and don’t have to be followed, so Dimon is still likely to get the multimillion-dollar award.
Solomon’s pay is about the same as that of his peers. James Gorman, who is the CEO of Morgan Stanley, also made $35 million for 2021. In 2021, Jamie Dimon will get a total of $34.5 million in pay.