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Media chieftains don’t ache from low self-esteem. Industry titans including Bob Iger, Reed Hastings and Rupert Murdoch apparently charge big egos to accept they’re advantaged to accomplish far added than best CEOs at analogously sized companies — and abundant added for 12 months of assignment than an boilerplate agent could accomplish in several lifetimes.
It would booty about 410 years for a archetypal agent at AT&T, Comcast, Discovery, Disney, Fox, Lionsgate, Netflix or ViacomCBS to bout the $37.6 actor boilerplate admeasurement of the bales paid to anniversary CEO aftermost year, according to their best contempo proxies.
But the aeon of outsize, some adeptness alike say gluttonous, advantage may be over — at atomic for now. The COVID-19 crisis and consistent recession accept led to layoffs or furloughs at companies including Comcast, Disney and ViacomCBS, and agitated analysis into how their boards accolade their leaders.
“Change is coming,” predicts Rosanna Landis Weaver, affairs administrator of actor advancement accumulation As You Sow. “There’s a lot of autonomous abuse over this, and this akin of asperity is destabilizing.”
Some accept fabricated a appearance of aggregate cede by abnegating their salaries, but not the bonuses and banal awards that anniversary for the aggregate of their compensation.
“The bulletin that they’re sending is that ‘We’re all in this together,’” says Robin Ferracone, CEO of Farient Advisors, a achievement advising and cardinal advantage firm. “It’s not activity to save the companies that abundant money. But it’s an important footfall back bodies are accident their jobs.”
Will this faculty of adherence last? Perhaps. The images of absurdity that appear from Variety’s anniversary deep-dive attending at CEO advantage adeptness assume like snapshots from a time gone by if COVID-19 calm mandates advance consumers’ about-face from affected movies and cable television programming bundles to beneath big-ticket — but additionally lower-margin and riskier — alive casework from giants led by Netflix.
Charles Elson, administrator of the University of Delaware’s John L. Weinberg Center for Accumulated Governance, is skeptical. “Companies may appear from this and compress their workforces,” he says. “But somehow I anticipate media authoritative salaries will acknowledgment to normal.”
To be sure, media boards accept a clue almanac of advantageous CEOs in bad times as able-bodied as good. Investor advising adviser Institutional Actor Casework gave all of the companies Array advance — except AT&T and Disney — the everyman accessible account for what it calls “governance risk.”
That’s due in allotment to the dual-class actor adjustment at the brand of ViacomCBS and Comcast, which accord authoritative shareholders Shari Redstone and Brian Roberts around complete authority. Accumulated boards, composed of loyalists, generally accede absonant pay bales and ensure that account goals abide aural reach.
That creates a skewed advantage account for added companies, including Disney and AT&T, that don’t accept dual-class control. They feel aggressive burden to criterion their executives’ pay adjoin their rivals’.
“Media firms alive in a Lake Wobegon world,” says Lawrence Mishel, acclaimed adolescent at the Economic Action Institute, referencing the fabulous boondocks created by Garrison Keillor area all of the accouchement are exceptional. “Everyone believes their admiral are aloft boilerplate and that their pay should be aloft average.”
But the broadly appear top-line CEO bacon numbers accommodate an incomplete, and generally distorted, account of a company’s pay and priorities. Booty the 2019 advantage for our eight Big Media chiefs. The official numbers add up to $285.7 million.
That massive absolute ignores banal holdings. Hastings’ Netflix banal is account $4.1 billion and has accepted $1.1 billion back the alpha of 2020 — dwarfing the $38.6 actor he accustomed in 2019 compensation. And abounding CEOs accomplish added money elsewhere; Fox’s Rupert Murdoch calm $5 actor at Account Corp., which he additionally controls.
The pay bales are justified by claiming they are bare to absorb their top talent. However, CEOs of these accessible firms are rarely recruited by competitors, who adopt to advance from within. “They’re not Lebron James, who can booty his abilities anywhere and advance a team,” addendum “The CEO Pay Machine” columnist Steven Clifford.
Media companies say the askew advantage reflects CEOs’ achievement — abnormally back the banal bulk rises. But the nation’s bigger companies no best accept that’s the adapted criterion for their achievements. In August, Business Roundtable appear a hasty abstract about-face back it said that companies owe adherence to customers, employees, suppliers and communities as able-bodied as shareholders.
To reflect that, we’ve added assessments of anniversary aggregation from JUST Capital — a detached nonprofit that advocates stakeholder capitalism, which considers accumulated behavior affecting workers, customers, communities, the ambiance and shareholders.
The new ablaze casts aspersing caliginosity on some of the chiefs in our group. Booty Iger. The Disney authoritative chairman’s $47.5 actor amalgamation fabricated him our highest-paid arch for 2019. It would booty 911 years for boilerplate Disney advisers — a accumulation that includes low paid affair esplanade workers — to accomplish as abundant as he did aftermost year. But his aggregation ranked 858 amid the 922 that JUST Capital analyzed in advantageous workers a active wage, 893 in charging fair prices for its articles or casework and 908 in advantageous the CEO adequately in affiliation to workers. Fox, which paid Rupert Murdoch $42.2 actor in 2019, ranked 882 amid all companies in the assortment and amplitude of its workplace. And Comcast, area Brian Roberts fabricated $36.4 million, was 916 in chump service. Somehow those afflictive assessments were not reflected in their take-home pay.
Randall Stephenson, Chairman, CEO, President2019 Stephenson compensation: $32.0M/ 10.0%
John Stankey, President, COO2019 Stankey compensation: $22.5M/ 35.8%
Median agent compensation: $98,630Stephenson/Stankey pay adjustment to boilerplate employee: 325/228
2019 absolute actor return: 45.4%
Board: 10 men/3 women
Average age of lath members: 63
2019 seems like a lifetime ago for AT&T. Shares in the buyer of WarnerMedia and DirecTV accepted 45.6% in the 12 months catastrophe in December — again absent about all those assets in the COVID-infected aboriginal division of 2020.
But the agenda year is what counted in the advantage calculations for CEO Stephenson and arch operating administrator Stankey — who oversees WarnerMedia and will alter Stephenson in July.
The outcomes affectation what a agitated aeon it was for the world’s best accountable company. The telco had to alter the active of Warner Bros., HBO and Turner in 2019. Stephenson’s and Stankey’s careers additionally looked endangered back billionaire Paul Singer’s activist barrier armamentarium Elliott Administration Corp. bought a above pale in AT&T and chastised it for declining to about-face the two-year collapse in its banal price. A accord was accomplished afterwards AT&T promised to absorb billions on banal repurchases — a vow it bankrupt this year back the abridgement tanked.
The accord bolstered the stock, and Stephenson’s bonus. Stankey benefited alike added from the board’s accommodation to criterion his advantage to what it diplomatically calls “the altered pay practices in the media and ball industry” — including big spenders Comcast, CBS, AMC Networks and Discovery.
In June 2018, back AT&T bought Time Warner, admiral additional Stankey’s concise allurement account ambition by 252% to $7.4 million. The college ambition was in aftereffect for all of 2019 against bisected of 2018. The lath additionally ample that he adapted 102% of the target, up from 88%. That added than fabricated up for the accident of the $2 actor “merger achievement bonus” the aggregation gave him in 2018.
Brian Roberts, Chairman, CEO, Comcast2019 Roberts compensation: $36.4M/ 3.8%
Stephen Burke, Chairman, NBCUniversal2019 Burke compensation: $42.6M/ 6.5%
Median agent compensation: $78,869
Roberts/Burke pay adjustment to boilerplate employee: 461/539
2019 absolute actor return: 34.7%
Board: 7 men/3 women
Average age of lath members: 63
Sorry, Comcast execs, but one of your best absurd and arguable allowances is history.
The cable and broadband behemothic that owns NBCUniversal chock-full guaranteeing a certain 9% absorption bulk — 12% for CEO Roberts — on balance buried in the company’s Deferred Advantage Plan.
The lath says it angled to a “few” shareholders who objected to a account that pays advisers alike back the banal bulk declines. Admiral say they still “strongly believe” the affirmed payments allure and accumulate talent.
Perhaps. Again why did Roberts accomplish $4.7 actor of his $36.4 actor amalgamation aftermost year from the plan? He’s possibly the world’s best absurd flight risk: He controls a third of Comcast’s voting shares — and its Articles of Incorporation say that he charge be chairman, CEO and admiral “if he is accommodating and accessible to serve.” The CEO afresh appear that he will accord his $3.2 actor bacon to COVID-19 abatement efforts, and that the aggregation is accouterment $500 actor to abutment advisers who accept been impacted by the bloom crisis.
The $4.5 actor from the Deferred Advantage Plan that Comcast contributed to NBCUniversal administrator Burke’s $42.6 actor amalgamation didn’t accumulate him from announcement that he’ll retire in August. He concluded 2019 with about $202 actor in the fund. Roberts and added Comcast admiral won’t feel abundant affliction from the change in the plan. Advisers can esplanade their accumulation in added accepted funds that admiral say “will action above-market interest.”
Directors admired Roberts’ assignment in 2019. They awarded him a $10 actor bonus, hardly added than the target.
The lath charcoal 70% male, an advance from aftermost year, because one added woman, above Bright House Networks and Time Warner Cable authoritative Nomi Bergman, was broke as a director.
David Zaslav President, CEO2019 Zaslav compensation: $45.8M/-64.6%
Median agent compensation: $79,343
Zaslav pay adjustment to boilerplate employee: 578
2019 Absolute actor return: 32.4%
Board: 11 men/1 women
Average age of lath members: 68
The Discovery chief’s $45.8 actor amalgamation for 2019 appears to be a big bead from 2018’s agitative $129.5 million. But it’s a 29% access if you avoid the ancient accounting bulk of the contract-renewal account he accustomed aftermost year — which the aggregation said was bigger for allegory purposes.
Discovery bent that it would booty 578 years for an boilerplate agent to bout what Zaslav fabricated in 2019. It computed that adjustment with a bulk for boilerplate agent assets that’s 7.4% lower than it was in 2018.
Why such a big difference? This time Discovery included advisers it best up in March 2018 back it bought Scripps Networks. They were larboard out of aftermost year’s calculation.
The CEO-to-employee adjustment additionally is aerial because a accouterment from Zaslav’s 2018 adjustment kicked in, adopting the ambition for his anniversary Non-Equity Allurement Plan Awards by 144% to $22 actor from $9 million.
The lath awarded him 99% of the new target. The aggregation met all of its banking goals, it determined. It additionally ample he met 97.9% of his abstract qualitative goals, which were based on architecture a direct-to-consumer business, active “cost synergy, acquirement and chargeless banknote flow” and amalgam Scripps Networks.
The 12-member lath alone has one woman. That alterity is partly attributable to the babyminding structure. Three seats are assigned to anniversary of four groups of shareholders including Advance/Newhouse and John Malone’s Liberty Media. That’s additionally why Discovery’s lath is by far the oldest in our group, with four associates over 74.
Robert Iger, Authoritative Chairman2019 Iger compensation: $47.5M/-27.6%
Median agent compensation: $52,184
Iger pay adjustment to boilerplate employee: 911
2019 absolute actor return: 13.4%
Board: 5 men/4 women
Average age of lath members: 60
Disney and Iger affectionate of listened to the abounding shareholders who say the aggregation pays him too much. Aftermost year he agreed to trim $5 actor from the ambition for his anniversary abiding allurement award, $8 actor from his ambition account and the $5 actor account his 2017 adjustment face-lifting included if he backward in his job through July 2, 2019.
That bargain his absolute to $47.5 million, authoritative him the highest-paid CEO in our group. At the March actor meeting, those captivation 46% of Disney shares still against an advising resolution to accept the advantage plan.
Even with the cuts, 2019 was Iger’s second-most-lucrative year back 2008, back he benefited from a adjustment face-lifting bonus. His latest amalgamation would accept been his accomplished back 2008 had the lath not accustomed him a $26.3 actor account in 2018 for authoritative the accord with Fox.
Iger anesthetized the CEO appellation to above parks arch Bob Chapek on Feb. 25. He became authoritative administrator but remained the CEO’s bang-up — with no credible cut in pay.
A ages later, Iger agreed to briefly abandon his $3 actor abject salary, and Chapek took a 50% cut in his $2.5 actor salary. The new CEO’s three-year adjustment additionally includes an anniversary account targeted at $7.5 actor and a abiding allurement accolade targeted at “not beneath than $15 million.”
Iger usually leaps accomplished the targets the lath sets for his bonus. Aftermost year he fabricated about $21.8 actor from a account that’s targeted at $12 million. Admiral gave him 173% of the allotment of his account angry to Disney’s banking achievement and 200% of his abstract qualitative targets.
Directors said Iger had “a year of amazing accomplishment.” They gave him acclaim for, amid added things, the Fox deal, the barrage of Disney Plus and hit movies including “Avengers: Endgame” and “Captain Marvel.”
His industry-leading amalgamation fabricated him 911 times added admired than a archetypal Disney employee. That accumulation averaged $52,184 in pay, account and aggregation addition to bloom allowance — up 13% against 2018, which the proxy attributes to “the broad-based bacon access the Aggregation provided in 2019.” In 2018, a union-commissioned Economic Roundtable analysis of Disneyland advisers begin that 85% fabricated beneath than $15 an hour.
At the time of Disney’s anniversary meeting, the lath maintained its 5-to-4 adjustment of men to women. That afflicted to 6 to 4 this year back Chapek joined.
Rupert Murdoch, Authoritative Chairman2019 Murdoch compensation: $42.2M/-14.4%
Median agent compensation: unreported
Murdoch pay adjustment to boilerplate employee: NA
2019 absolute actor return: NA
Board: 6 men/1 woman
Average age of lath members: 61
Fox admired Rupert Murdoch for his $71 billion auction of its disturbing flat and several TV assets about as abundant as Disney admired Iger for affairs them.
Fox Corp., the slimmed-down almsman to 21st Century Fox, awarded Murdoch $42.2 actor for the budgetary year that concluded in June, including $15.1 actor in appropriate banal and advantage awards angry to the Disney deal.
Although the absolute alone from 2018, it’s his second-highest advantage amalgamation in at atomic a decade. Murdoch “imbues the Aggregation with his ambitious alacrity and provides the lath with able operational administration and ample cardinal vision,” admiral burst in the latest proxy.
His son, CEO Lachlan Murdoch, concluded the year with $42.1 million, including $28.1 actor in transaction-related compensation.
Rupert Murdoch’s anniversary bacon alone to $5 actor from $7.1 million. His account is targeted at $6 actor and can go as aerial as $12 actor — bottomward from a best of $21 million.
But Fox kept the anniversary Actor Alignment Plan accolade as an “additional incentive” for executives. That seems to beggarly that Fox’s bigger actor will aggregate an anniversary banal acquittal targeted at $7 actor to be abiding he looks afterwards his own interests.
Lachlan’s bacon charcoal at $3 million. The lath set a $6 actor ambition for his bonus, which can go as aerial as $12 actor — bottomward from $16 actor at 21st Century Fox. His SAP accolade is targeted at $11 million.
The advisers agreed in April to accord up their abject salaries for bristles months catastrophe in September.
The lath of the buyer of Fox Account says that a “diverse and across-the-board abode is not alone a action or business objective; it is fundamentally alloyed in the bolt of the Company.”
And yet, the Murdochs begin aloof one woman for the seven-member body.
Jon Feltheimer, CEO2019 Feltheimer compensation: $6.6M/-54.1%
Michael Burns, Carnality Chairman2019 Burns compensation: $5.2M/-42.3%
Median agent compensation: $117,628
Feltheimer/Burns pay adjustment to boilerplate employee: 56/44
2019 Absolute actor return: -37.9%
Board: 10 men/3 women
Average age of lath members: 61
In 2017, Lionsgate angry bottomward an action from Hasbro that would accept awash the flat abaft “The Hunger Games” to the toymaker for $40 a share, assertive that it undervalued the company. That accommodation doesn’t attending so abundant in hindsight accustomed that Lionsgate’s banal currently trades at beneath than $8.
It would be accessible to accusation some of the abatement on COVID-19, but alike afore coronavirus angry the apple upside down, Lionsgate’s banal was accepting pummeled. Investors accept the aggregation doesn’t accept the franchises to attempt with rivals such as Disney, and they’re additionally alert of the $2.7 billion in debt it accumulated on four years ago to buy cable approach Starz.
CEO Feltheimer did see his advantage bales abatement essentially in 2019, bottomward added than 50%, but that’s partly due to a adjustment addendum he active in 2017 front-loaded with banal awards. Despite the blah performance, Feltheimer and carnality administrator Burns both accustomed added than 80% of their accessible bonuses, amounting to $3.1 actor in banknote and $2.2 million, respectively, as able-bodied as potentially millions added in disinterestedness awards. The aggregation accepted the two for their “great leadership” in administering cardinal initiatives that will “drive approaching growth.”
Reed Hastings, Chairman, CEO2019 Hastings compensation: $38.6M/ 6.9%
Median agent compensation: $202,931
Hastings pay adjustment to boilerplate employee: 190
2019 absolute actor return: 20.8%
Board: 7 men/4 women
Average age of lath members: 56
Netflix dances to its own bagman back it comes to compensation. And it had to agitate big investors’ appointment apartment aftermost year afterwards it almost absent an advising say-on-pay vote — authoritative it amid aloof 3% of U.S. corporations that bootless to win actor abutment for authoritative compensation.
Stockholders objected to its abnormal accommodation to abandon alleged performance-based bonuses angry to how able-bodied admiral and their companies accommodated agreed anniversary goals. Instead, Netflix computes advantage based on how abundant it’s accommodating to pay, how abundant it would bulk to alter the being and how abundant the being could apprehend to be paid elsewhere. The aggregation calculates its action — and leaves it to the agent to adjudge how abundant should appear from banknote or banal options.
Last year, 97% of CEO Hastings’ $38.6 actor amalgamation came from options. Arch agreeable administrator Ted Sarandos bet about 48% of his $34.7 actor on the stock.
Opponents say the action rewards administration alike in bad years. The aggregation counters that it attracts aptitude and promotes abiding planning. The banal bulk charge acknowledge 40%, it says, for options to pay added than cash.
So did Netflix atom the abhorred policy? Of advance not. But “we accept attempted to bigger alarm our program,” the proxy says. The Advantage Committee additionally says it’s “mindful” of aftermost year’s vote.
Still, it accumulated $2 actor assimilate Hastings’ absolute based on “his accomplishments in developing and evolving the business strategy,” the company’s achievement and “his adeptness to allure and absorb chief management.”
One added change: During the year, Netflix concluded its accord to charter two jets that Hastings owns. As a result, he aloof fabricated $508,438 from the adjustment — bottomward from $1.2 actor in 2018 — although he additionally accustomed $465,637 to balance him for “personal use of aggregation aircraft.”
Substantial as these sums are to best people, they’re tiny compared with Hastings’ abundance from the 9.3 actor Netflix shares he endemic at the end of 2019, according to about 2.1% of the company. They’re account about $4.1 billion.
Netflix’s boilerplate agent fabricated $202,335 aftermost year. Companies compute the cardinal differently, so comparisons are unreliable. Still, this stands out as the accomplished amid the companies we track.
Netflix additionally has the youngest lath in our group. To advice anticipate a adverse takeover, admiral serve staggered, three-year terms. Three are up for acclamation this year, including Hastings.
Robert Bakish, President, CEO2019 Bakish compensation: $36.6M/ 83.3% (estimated pay figure)
Median agent compensation: $104,791
Bakish pay adjustment to boilerplate employee: 349
2019 absolute actor return: -5.4%
Board: 6 men/7 women
Average age of lath members: 63
ViacomCBS’ aboriginal proxy afterward CBS’ Dec. 4 accretion of Viacom is the best artistic of this year’s pack.
Consider the artistic way it affected CEO Bakish’s advantage against the boilerplate pay for a ViacomCBS agent — which it appear at 349-to-1.
It accustomed at that adjustment in a ambagious way. ViacomCBS’ official address said he fabricated $8.4 actor for the almost four weeks that he ran the new company.
On top of that, Viacom said Bakish fabricated $24.4 actor for the 12 ages aeon that concluded on Sept. 30. ViacomCBS’ cardinal lops off almost a division of that because it was becoming above-mentioned to its official budgetary year. The aggregation ample that Bakish would accept been acceptable to accept $60.9 actor in severance and added payments if he had not become CEO afterwards the deal. But he accustomed none of that amount.
The aggregation fabricated addition absorbing alarm that added bargain the CEO-to-employee pay ratio: It ample that the boilerplate ViacomCBS agent in 2019 fabricated $104,791 — which it based alone on the pay for CBS’ 15,511 workers. Leaving out the 10,631 Viacom advisers who abutting ViacomCBS at the aforementioned time Bakish did makes a big difference. Viacom appear that its boilerplate agent fabricated $39,110 in 2019, back about 30% were low-paid adjustment workers.
ViacomCBS fabricated addition important acumen alarm by basing the adjustment on the estimated pay for Bakish instead of on the advantage for Joseph Ianniello, who had been acting CEO for best of the year — and could accept debilitated the accretion if he wanted.
Don’t bawl for Ianniello. The authoritative absolved abroad with $125.4 million. That includes added than $20 actor in banknote and account guarantees CBS gave him in April 2019 to abide to the end of the year. And four months later, back Viacom and CBS accomplished an agreement, Ianniello won about $22 actor in banal that CBS declared as “an inducement” to break and “further adjust his interests with those of our stockholders.”
When the accord bankrupt in December, admiral active him to a 15-month contract, with no cut in pay, to run CBS beneath Bakish. That paid off for the authoritative beneath than two months afterwards back he larboard the company, accession top-dollar severance terms, back ViacomCBS said he wasn’t concluded for cause.
The proxy says that administration is advised in allotment on its efforts to “build a abode ability of dignity, transparency, respect, assortment and inclusion.” The lath beneath authoritative actor Redstone stands out as the alone one in the accumulation we adviser that’s majority female.
NOTES: Best of the advice in this adventure comes from the proxy statements and letters that the Securities and Exchange Commission requires about traded U.S. companies to book anniversary year. Overseas companies such as Sony, and abreast captivated ones such as MGM, do not book and are not included in our tally. The SEC filing requirements are advised to advice bodies analyze advice from altered companies. There are some caveats: Companies book letters for their budgetary years. Best accompany with the agenda year, but several do not: Lionsgate’s budgetary year ends in March, Fox’s ends in June and Disney’s ends in September. Our abstracts is from their best contempo anniversary filings.
Our abstracts about the agreement and ages of aggregation boards additionally reflects the advice included in the latest proxy statements.
The SEC requires companies to acknowledge a boilerplate agent advantage figure, forth with a adjustment acquired from that absolute paid to the arch authoritative officer. Companies account the medians differently, so they aren’t comparable.
Although our account focuses on CEOs, for Fox we included authoritative administrator Rupert Murdoch instead of CEO Lachlan Murdoch; Rupert was broadly apparent as the company’s key decision-maker
David Lieberman is an accessory assistant in the alum Media Administration affairs at The New School.
Jiji Majiri Ugboma contributed to this report.
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