Pay surge for top US execs last year

(From left) Texas Governor Greg Abbott, Charter Communications CEO Thomas Rutledge, and assistant to the President for intragovernmental and technology initiatives Reed Cordish at the White House last Wednesday.
(From left) Texas Governor Greg Abbott, Charter Communications CEO Thomas Rutledge, and assistant to the President for intragovernmental and technology initiatives Reed Cordish at the White House last Wednesday.PHOTO: REUTERS

NEW YORK • Pay packages for the United States' top executives once again climbed in 2016 after slipping the year before.

Perhaps the pay surge reflects the times: Stocks are coming off a strong run. Unemployment is low. The economy is percolating. And President Donald Trump is not only promising to roll back what he calls excessive business regulations, but also listening keenly to what corporate America has to say.

Since taking office on Jan 20, the businessman-turned-politician has met hundreds of executives, including at least 41 of last year's 200 best-paid chief executive officers (CEOs), a New York Times analysis shows.

The biggest winner last year was Mr Thomas Rutledge of Charter Communications, who pulled down a US$98 million (S$135.3 million) pay package, according to the Equilar 200 highest-paid chief executive rankings, conducted for The New York Times.

Mr Rutledge, 63, stormed to the front of the pack after closing his company's mega-merger, a US$65 billion takeover of Time Warner and a smaller competitor. For that, he got a big bump in pay.

Mr Rutledge met Mr Trump in the Oval Office in March. The President lavished him with praise for a plan to add 20,000 jobs, although the broad outlines of that initiative had been laid out nearly two years earlier.

This combination - the pay gains for chief executives, and the President's pledge to deregulate and cut corporate tax rates - sets the stage for perhaps the most consequential moment for corporate governance since the 2008 financial crisis.

Rising executive compensation only widens the gap between top executives and most US workers. Mr Rutledge, for instance, made 2,617 times the average US worker's salary.

Discrepancies like that helped fuel the populist frustration that led to Mr Trump's election and, in the aftermath of the financial crisis, led to the passage of the 2010 Dodd-Frank financial overhaul Act.

Yet the President's team is considering rolling back a Dodd-Frank rule that, starting next year, would make it much easier for employees at a publicly traded company to compare their own pay to the chief executive's.

Overall, technology company CEOs are well represented on the list of 200 best-paid CEOs, along with executives from financial services companies and media companies.

The best-paid female chief executive is Oracle's Ms Safra Catz, whose total package was valued at US$40.9 million, making her the eighth highest-paid CEO in 2016.

Executives in the top 200 who have met Mr Trump since his inauguration include Ms Virginia Rometty of IBM, Mr Stephen Wynn of Wynn Resorts and Ms Marillyn Hewson of Lockheed Martin.

Mr Trump, who sees himself as the nation's CEO, has made the pageantry of meetings with CEOs a priority during his first few months in office. The visits have become an opportunity for the President to trumpet the progress he says his administration is making in creating jobs and reducing regulations.

What is clear from the Equilar study is that many CEOs were doing quite well even before Mr Trump took office. Average compensation for the 200 highest-paid executives - a list which changes from year to year - rose about 2 per cent, to US$19.7 million, from 2015.

For the 200 specific individuals on this year's list, 2016 was especially kind. Those executives saw an average gain of 16 per cent over what they received in 2015.

In all, Equilar reports that the median salary for CEOs at all publicly traded companies with annual revenues of at least US$1 billion came in at US$6.14 million, down slightly from US$6.19 million in 2015.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on May 29, 2017, with the headline 'Pay surge for top US execs last year'. Print Edition | Subscribe