How Much the Top CEOs of S&P 500 Companies Get Paid
How much do the CEOs from some of the world’s most important companies get paid, and do these top CEOs deliver commensurate returns to shareholders?
Today’s infographic comes to us from HowMuch.net and it visualizes data on S&P 500 companies to see if there is any relationship between CEO pay and stock performance.
For Richer or Poorer
To begin, let’s look at the highest and lowest paid CEOs on the S&P 500, and their associated performance levels. Data here comes from a report by the Wall Street Journal.
Below are the five CEOs with the most pay in 2018:
|Rank||CEO||Company||Pay (2018)||Shareholder Return|
|#1||David Zaslav||Discovery, Inc.||$129.4 million||10.5%|
|#2||Stephen Angel||Linde||$66.1 million||3.1%|
|#3||Bob Iger||Disney||$65.6 million||20.4%|
|#4||Richard Handler||Jefferies||$44.7 million||-14.9%|
|#5||Stephen MacMillan||Hologic||$42.0 million||11.7%|
Last year, David Zaslav led top CEOs by taking home $129.4 million from Discovery, Inc., the parent company of various TV properties such as the Discovery Channel, Animal Planet, HGTV, Food Network, and other non-fiction focused programming. He delivered a 10.4% shareholder return, when the S&P 500 itself finished in negative territory in 2018.
Of the mix of highest-paid CEOs, Bob Iger of Disney may be able to claim the biggest impact. He helped close a $71.3 billion acquisition of 21st Century Fox, while also leading Disney’s efforts to launch a streaming service to compete with Netflix. The market rewarded Disney with a 20.4% shareholder return, while Iger received a paycheck of $65.6 million.
Now, let’s look at the lowest paid CEOs in 2018:
|Rank||CEO||Company||Pay (2018)||Shareholder Return|
|#3||A. Jayson Adair||Copart||$203,000||82.2%|
|#4||Warren Buffett||Berkshire Hathaway||$398,000||3.0%|
|#5||Valentin Gapontsev||IPG Photonics||$1.7 million||-47.1%|
On the list of lowest paid CEOs, we see two tech titans (Larry Page and Jack Dorsey) that have each opted for $1 salaries. Of course, they are both billionaires that own large amounts of shares in their respective companies, so they are not particularly worried about annual paychecks.
Also appearing here is Warren Buffett, who is technically paid $100,000 per year by Berkshire Hathaway plus an amount of “other compensation” that fluctuates annually. While this is indeed a modest salary, the Warren Buffett Empire is anything but modest in size – and the legendary value investor currently holds a net worth of $84.3 billion.
Finally, it’s worth noting that while J. Jayson Adair of Copart was one of the lowest paid CEOs at $203,000 in 2018, the company had the best return on the S&P 500 at 82.2%. Today, the company’s stock price still sits near all-time highs.
Finally, let’s take a peek at the CEOs that received the highest shareholder returns, and if they seem to correlate with compensation at all.
|Rank||CEO||Company||Pay (2018)||Shareholder Return|
|#1||A. Jayson Adair||Copart||$203,000||82.2%|
|#2||Lisa Su||AMD||$13.4 million||79.6%|
|#3||François Locoh-Donou||F5 Networks||$6.9 million||65.4%|
|#4||Sanjay Mehrotra||Micron Technology||$14.2 million||64.3%|
|#5||Ken Xie||Fortinet||$6.8 million||61.2%|
Interestingly, three of highest performing CEOs – in terms of shareholder returns – actually took home smaller amounts than the median S&P 500 annual paycheck of $12.4 million. This includes the aforementioned A. Jayson Adair, who raked in only $203,000 in 2018.
That said, there is a good counterpoint to this as well.
Of the five CEOs who had the worst returns, four of them made less than the median value of $12.4 million, while one remaining CEO took home slightly more. In other words, both the best and worst performing CEOs skew towards lower-than-average pay to some degree.
The Habits of Highly Effective Leaders
This infographic delves into what it takes to become an effective leader, and how those qualities can impact a company—beyond employee satisfaction.
How Strong Leadership Impacts the Bottom Line
Organizations of all shapes and sizes are under immense pressure to retain good talent.
High employee turnover can directly impact a company’s bottom line—with many studies suggesting poor leadership is one of the main causes.
Today’s infographic from Online PhD Degrees explores what it takes to be an strong leader, and the behaviors of poor leaders that should be avoided at all costs.
In today’s rapidly changing world, how can the qualities of a strong leader positively shape a company’s future?
The Benefits of Investing in Leadership
Effective leadership is worth its weight in gold, with 58% of employees claiming they would choose having a great boss over a higher salary.
Not only that, 94% of employees with great bosses feel passionate about their jobーnearly twice as many as those working for a bad boss. A strong leader increases employee loyalty, creating a conducive environment for reaching a company’s goals.
In fact, research shows that companies with strong leaders are crucial when it comes to outperforming industry competitors and are three times more prepared to react to the speed of change. Moreover, a company with a strong leader is almost five times more likely to have higher customer engagement and retention rates.
How to Lead Effectively
While each company has its own processes and demands different skill sets, there are core behaviors that separate leaders from managers:
- Clear Purpose: Clearly articulating the company’s future vision to all levels of staff in a clear and concise way.
- Contagious Passion: While managers light fires under people to motivate them, leaders light fires in people.
- Self-Accountability: The expectation to work harder than employees and set a standard of excellence.
- Flexible Determination: Leaders are agile and open to change.
- Sustainable Outlook: Focusing on long-term goals proves to a team that a leader is invested in the long-haul.
- Dual Focus: Beyond thinking big picture, leaders provide employees with a clear and actionable strategy for success.
Effective leaders are born from this combination of behaviors. However, one of them has the farthest-reaching impact, both on employees and a company’s bottom line: purpose.
Purpose and Performance
The Global Leadership Forecast finds that a strong and well-executed purpose can build organizational resilience and improve long-term financial performance.
Leaders who amplify an organization’s purpose create a culture of optimism where employees feel safe in proposing new ideas that will shape the trajectory of a company.
The Future of Leadership
To stay competitive, continuous learning and re-skilling should be at the heart of every organization’s leadership strategy. Leaders of the future should possess the ability to redesign jobs in a more fluid way and lean in to the changing nature of work.
“If we don’t disrupt our business, somebody else is going to do it for us.”
While management is a foundational skill, organizations need to invest in their leaders to ensure constant growth. Embracing the traits of an effective leader can not only provide improved returns—it also empowers organizations to thrive in an uncertain future.
10 Global Insights into a Transforming World
Every day, global trends are reshaping society and the business landscape. Here are 10 insights into how the world is changing—and where we are heading.
10 Global Insights into a Transforming World from 2019
Every day, global trends are reshaping society and the business landscape.
Today’s infographic from McKinsey Global Institute (MGI) presents a snapshot of 10 insights into how the world is changing, based on its research work from 2019.
How did we get here, and where are we going?
A Connected World in Flux
Globalization is making the world “shrink” every day, as humans and trade become increasingly connected. However, there are signs that point to a new phase of globalization that is leading to different outcomes than prior years.
1. Globalization in Transition
Global exports are fundamentally shifting. Although manufactured goods are traded at higher volumes, certain services have grown up to three times faster.
The compound annual growth rate (CAGR, 2007-2017) for different sectors are as follows:
|Sectors||Global CAGR (% of GDP)|
|Telecom and IT services||7.8%|
|IP charges services||5.2%|
|Financial and insurance services||3.2%|
This has a profound impact on the mix of industries and countries involved in this shift away from goods and towards services. Asia is coming of age in this phase of the global economy.
2. Asia’s Ascent
Trade with and within Asia is rising, and shows no signs of slowing down. The region’s economic might is growing rapidly, and with higher disposable incomes, consumption is growing too.
In China, there is a new dynamic at play.
3. China’s Changing Relationships
Compared to other developed nations, China’s economy is relatively closed. The country is re-balancing its focus towards domestic consumption and relying less on other countries for trade, technology, and capital.
At the same time, the rest of the world is increasingly exposed and tied to China for the same things—and such unequal engagement has a ripple effect on everything from financial markets to flows of technology and innovation.
Technology and the Future of Work
New technologies like artificial intelligence are sparking new opportunities, but they also raise questions about the future of work across geographies and gender.
4. Increasingly Digital India
As the costs of devices and data plummet, India’s digital adoption is surging—it closely competes with China for the highest digital population across everything from smartphone ownership to social media users.
As mass adoption of digital technologies continues, it is poised to add significant economic value to the Indian economy.
|Digital sector||Current economic value||Maximum potential value (2025E)|
|Core digital services|
e.g. IT business process management
|Newly digitizing sectors|
e.g. Financial services
Companies worldwide are also integrating new technologies—changing the nature of work itself.
5. New Geography of Work
By 2030, talent and investment in the U.S. will be concentrated in a few regions—with 60% of job growth coming from just 25 hubs.
These are just some examples of places which see double-digit potential net job growth by 2030. However, all regions will face unique challenges in the next decade.
6. Automation’s Effect on Gender at Work
Globally, women and men are at similar risk of losing their jobs to automation by 2030.
- Women: 107 million FTEs
Share of female employment, 2017: 20%
- Men: 163 million FTEs
Share of male employment, 2017: 21%
*FTE: full time equivalent. Based on midpoint automation scenario.
While everyone needs to adapt in the age of automation, women face more barriers. They spend up to 1.1 trillion hours on unpaid care work, nearly three times that of men (400 billion hours).
Women are also often in lower-paid roles or male-dominated professions. Additionally, many women have less access to digital technology, and limited flexibility to pursue education. These factors make it harder for women to “catch up” and bridge the gap left behind by automation.
Inequalities and Uncertainties
It’s clear that while technology generates opportunities, it also creates new social challenges. Low- and middle-income households face stagnating incomes, higher debt, and rising basic costs.
7. Declining Labor Share of Income
The U.S. labor share of income has been dropping for years—but ¾ of this decline has occurred since 2000.
According to McKinsey Global Institute, boom-bust commodity cycles and rising depreciation are the main factors behind this trend, more so than commonly-cited automation or globalization.
Stagnating incomes mean less purchasing power, while the cost of basics are sharply rising.
8. Changing Consumption Costs
The global inequality gap has narrowed, but within developed economies, it has actually increased.
Technology and globalization have made many discretionary goods cheaper. However, basic costs such as education, housing, and healthcare have ballooned compared to the rate of inflation over the past decade.
With wages stagnating, the higher costs for basics have eaten into disposable incomes in many mature economies.
A Changing Business World
Global trends drastically influence how companies compete with one another, transforming corporate dynamics worldwide.
9. Corporate Superstars
In just two decades, the distribution of economic profits has been growing increasingly wider. The top 10% of companies (>$1 billion in revenue) brings in an ever-larger share of total profits, while the losses of the bottom 10% share deepen.
- Average profit per company, 1995-1997
Top 10%: $0.85B
Bottom 10%: -$1.02B
- Average profit per company, 2014-2016
Top 10%: $1.36B
Bottom 10%: -$1.56B
*In 2016 dollars. Considers corporations with ≥$1 billion average sales (inflation-adjusted). Sample sizes: 2,450 companies (1996–1997) and 5,750 companies (2014–2016).
In essence, the bottom 10% destroy as much value as the top 10% create—and it has only intensified in 20 years.
10. Latin America’s Missing Middle
Latin America best exemplifies this corporate trend of companies “thriving” versus “surviving”.
Compared to similar economies, Latin American countries lack mid-size companies with over $50M in revenue. The Latin American average for firms per $1T GDP is 65 firms, while 100 firms is the benchmark average.
While Asia’s share of the largest firms is widely distributed across countries, Latin American enterprises are lagging behind.
What does the Future Hold?
CEOs and leaders will need to adapt to the new age of disruption—and quickly. To become a 21st century company, they must ask 10 crucial questions about how they operate in an increasingly complex world:
- What is our mission and purpose as a company?
- How far do we go beyond shareholder capitalism? How are we accountable to different stakeholders?
- Who benefits from our economic success? How?
- What is the time horizon for managing our economic success and impact?
- What is our responsibility to our workforce, especially given future-of-work implications?
- How do we leverage data and technology responsibly and ethically?
- What are our aspirations for inclusion and diversity?
- What is our responsibility for societal and sustainability issues involving our business, and beyond?
- What are our responsibilities regarding participants in our platforms, ecosystems, supply and value chains and their impact on society?
- How should we address the global and local (including national) imperatives and implications of how we compete, contribute and operate?
As the 10 insights suggest, global trends are profoundly altering the course of our future. Their impact varies greatly depending on demographics and region.
Everyone—business leaders, policy makers, and individuals worldwide—will need to adapt to the realities of a world in transformation.
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