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 | $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 that had the worst returns, four of them made below the median value, while the remaining one took home slightly more than $12.4 million. In other words, both the best and worst performing CEOs skew towards lower-than-average pay to at some degree.