Markets

Here’s How Much the Top CEOs of S&P 500 Companies Get Paid

Published

3 years ago

July 10, 2019

Jeff Desjardins

Here's How Much Top CEOs of S&P 500 Companies Get Paid

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
#1	Larry Page	Alphabet	$1	-0.8%
#2	Jack Dorsey	Twitter	$1	19.7%
#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.

Maxing Returns

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.

Technology

Thematic Investing: 3 Key Trends in Cybersecurity

Cyberattacks are becoming more frequent and sophisticated. Here’s what investors need to know about the future of cybersecurity.

Written By

Marcus Lu

Graphics & Design

Sam Parker

Published August 11, 2022 • Updated August 11, 2022 •

Thematic Investing: 3 Key Trends in Cybersecurity

In 2020, the global cost of cybercrime was estimated to be around $945 billion, according to McAfee.

It’s likely even higher today, as multiple sources have recorded an increase in the frequency and sophistication of cyberattacks during the pandemic.

In this infographic from Global X ETFs, we highlight three major trends that are shaping the future of the cybersecurity industry that investors need to know.

Trend 1: Increasing Costs

Research from IBM determined that the average data breach cost businesses $4.2 million in 2021, up from $3.6 million in 2017. The following table breaks this figure into four components:

Cost Component	Value ($)
Cost of lost business	$1.6M
Detection and escalation	$1.2M
Post breach response	$1.1M
Notification	$0.3M
Total	$4.2M

The greatest cost of a data breach is lost business, which results from system downtimes, reputational losses, and lost customers. Second is detection and escalation, including investigative activities, audit services, and communications to stakeholders.

Post breach response includes costs such as legal expenditures, issuing new accounts or credit cards (in the case of financial institutions), and other monitoring services. Lastly, notification refers to the cost of notifying regulators, stakeholders, and other third parties.

To stay ahead of these rising costs, businesses are placing more emphasis on cybersecurity. For example, Microsoft announced in September 2021 that it would quadruple its cybersecurity investments to $20 billion over the next five years.

Trend 2: Remote Work Opens New Vulnerabilities

According to IBM, companies that rely more on remote work experience greater losses from data breaches. For companies where 81 to 100% of employees were remote, the average cost of a data breach was $5.5 million (2021). This dropped to $3.7 million for companies that had under 10% of employees working from home.

A major reason for this gap is that work-from-home setups are typically less secure. Phishing attacks surged in 2021, taking advantage of the fact that many employees access corporate systems through their personal devices.

Type of Attack	Number of attacks in 2020	Number of attacks in 2021	Growth (%)
Spam phishing	1.5M	10.1M	+573%
Credential phishing	5.5M	6.2M	+13%

As detected by Trend Micro’s Cloud App Security.

Spam phishing refers to “fake” emails that trick users by impersonating company management. They can include malicious links that download ransomware onto the users device. Credential phishing is similar in concept, though the goal is to steal a person’s account credentials.

A tactic you may have seen before is the Amazon scam, where senders impersonate Amazon and convince users to update their payment methods. This strategy could also be used to gain access to a company’s internal systems.

Trend 3: AI Can Reduce the Cost of a Data Breach

AI-based cybersecurity can detect and respond to cyberattacks without any human intervention. When fully deployed, IBM measured a 20% reduction in the time it takes to identify and contain a breach. It also resulted in cost savings upwards of 60%.

A prominent user of AI-based cybersecurity is Google, which uses machine learning to detect phishing attacks within Gmail.

Machine learning helps Gmail block spam and phishing messages from showing up in your inbox with over 99.9% accuracy. This is huge, given that 50-70% of messages that Gmail receives are spam.
– Andy Wen, Google

As cybercrime escalates, Acumen Research and Consulting believes the market for AI-based security solutions will reach $134 billion by 2030, up from $15 billion in 2021.

Introducing the Global X Cybersecurity ETF

The Global X Cybersecurity ETF (Ticker: BUG) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Cybersecurity Index. See below for industry and country-level breakdowns, as of June 2022.

Sector (By security type)	Weight
Cloud	28.0%
Network	25.1%
Identity	17.7%
Internet	15.0%
Endpoint	12.8%

Country	Weight
🇺🇸 U.S.	71.6%
🇮🇱 Israel	13.2%
🇬🇧 UK	8.2%
🇯🇵 Japan	5.5%
🇰🇷 South Korea	0.9%
🇨🇦 Canada	0.6%

Totals may not equal 100% due to rounding.

Investors can use this passively managed solution to gain exposure to the rising adoption of cybersecurity technologies.

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Markets

Visualizing Major Layoffs At U.S. Corporations

This infographic highlights the accelerating pace of layoffs so far in 2022, as businesses cut costs ahead of a potential recession.

Published

6 days ago

August 9, 2022

Marcus Lu

Visualizing Major Layoffs at U.S. Corporations

Hiring freezes and layoffs are becoming more common in 2022, as U.S. businesses look to slash costs ahead of a possible recession.

Understandably, this has a lot of people worried. In June 2022, Insight Global found that 78% of American workers fear they will lose their job in the next recession. Additionally, 56% said they aren’t financially prepared, and 54% said they would take a pay cut to avoid being laid off.

In this infographic, we’ve visualized major layoffs announced in 2022 by publicly-traded U.S. corporations.

Note: Due to gaps in reporting, as well as the very large number of U.S. corporations, this list may not be comprehensive.

An Emerging Trend

Layoffs have surged considerably since April of this year. See the table below for high-profile instances of mass layoffs.

Company	Industry	Layoffs (#)	Month
Peloton	Consumer Discretionary	2,800	February
Funko	Consumer Discretionary	258	April
Robinhood	Financial Services	~400	April
Nektar Therapeutics	Biotechnology	500	April
Carvana	Automotive	2,500	May
Doma	Financial Services	310	May
JP Morgan Chase & Co.	Financial Services	~500	June
Tesla	Automotive	200	June
Coinbase	Financial Services	1,100	June
Netflix	Technology	300	June
CVS Health	Pharmaceutical	208	June
StartTek	Technology	472	June
Ford	Automotive	8,000	July
Rivian	Automotive	840	July
Peloton	Consumer Discretionary	2,000	July
LoanDepot	Financial Services	2,000	July
Invitae	Biotechnology	1,000	July
Lyft	Technology	60	July
Meta	Technology	350	July
Twitter	Technology	<30	July
Vimeo	Technology	72	July
Robinhood	Financial Services	~795	August

Here’s a brief rundown of these layoffs, sorted by industry.

Automotive

Ford has announced the biggest round of layoffs this year, totalling roughly 8,000 salaried employees. Many of these jobs are in Ford’s legacy combustion engine business. According to CEO Jim Farley, these cuts are necessary to fund the company’s transition to EVs.

We absolutely have too many people in some places, no doubt about it.
– Jim Farley, CEO, Ford

Speaking of EVs, Rivian laid off 840 employees in July, amounting to 6% of its total workforce. The EV startup pointed to inflation, rising interest rates, and increasing commodity prices as factors. The firm’s more established competitor, Tesla, cut 200 jobs from its autopilot division in the month prior.

Last but not least is online used car retailer, Carvana, which cut 2,500 jobs in May. The company experienced rapid growth during the pandemic, but has since fallen out of grace. Year-to-date, the company’s shares are down more than 80%.

Financial Services

Fearing an impending recession, Coinbase has shed 1,100 employees, or 18% of its total workforce. Interestingly, Coinbase does not have a physical headquarters, meaning the entire company operates remotely.

A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue declined significantly.
Brian Armstrong, CEO, Coinbase

Around the same time, JPMorgan Chase & Co. announced it would fire hundreds of home-lending employees. While an exact number isn’t available, we’ve estimated this to be around 500 jobs, based on the original Bloomberg article. Wells Fargo, another major U.S. bank, has also cut 197 jobs from its home mortgage division.

The primary reason for these cuts is rising mortgage rates, which are negatively impacting the demand for homes.

Technology

Within tech, Meta and Twitter are two of the most high profile companies to begin making layoffs. In Meta’s case, 350 custodial staff have been let go due to reduced usage of the company’s offices.

Many more cuts are expected, however, as Facebook recently reported its first revenue decline in 10 years. CEO Mark Zuckerberg has made it clear he expects the company to do more with fewer resources, and managers have been encouraged to report “low performers” for “failing the company”.

Realistically, there are probably a bunch of people at the company who shouldn’t be here.
– Mark Zuckerberg, CEO, Meta

Also in July, Twitter laid off 30% of its talent acquisition team. An exact number was not available, but the team was estimated to have less than 100 employees. The company has also enacted a hiring freeze as it stumbles through a botched acquisition by Elon Musk.

More Layoffs to Come…

Layoffs are expected to continue throughout the rest of this year, as metrics like consumer sentiment enter a decline. Rising interest rates, which make it more expensive for businesses to borrow money, are also having a negative impact on growth.

In fact just a few days ago, trading platform Robinhood announced it was letting go 23% of its staff. After accounting for its previous layoffs in April (9% of the workforce), it’s fair to estimate that this latest round will impact nearly 800 people.