The pay for many CEOs soared as the U.S. economy was wriggling out of the COVID-19 pandemic, and in recent years, shareholders have been exercising their “say on pay” vote by putting pressure on companies to hold the line on executive compensation packages, In 2021, a record number of S&P 500 companies failed to secure shareholder majority in support of their CEO pay packages.
Now the latest release of an annual ranking of “overpaid” CEOs has found one who pulled in more than $200 million in “excess pay,” putting him ahead of the chiefs at a who’s-who of giants in the technology, service and luxury sectors.
Warner Bros. Discovery chief executive David Zaslav claimed the top position after he received $232.6 million in excess pay, according to the report from shareholder advocacy As You Sow published Thursday. His total pay amounted to $246.7 million. A bulk of the pay came from options held by the CEO prior to the Discovery’s merger with WarnerMedia, Reuters reported.
Warner Bros. Media told Fortune that the compensation reflects the extension of Zaslav’s employment agreement to ensure his long-term leadership of Warner Bros. Discovery. “The vast majority of the headline number is theoretical because it is based on a one-time options grant that only starts to provide financial benefit to Mr. Zaslav if WBD’s stock price more than doubles, representing in excess of $50 billion of additional value for shareholders,” the company said.
Zaslav was followed by the CEO of cosmetics company Estée Lauder, Fabrizio Freda, and of entertainment and casino gaming company Penn National Gaming, Jay Snowden.
The report uses three data metrics from S&P 500 companies to identify how overpaid CEOs are—the “excess” pay, which is calculated through a statistical regression between shareholder return and CEO pay; the proportion of shares voting against the CEO’s pay; and the difference between median workers’ pay and the CEO’s pay. The data is then compiled and ranked to identify the most overpaid chief executives.
Tech titans
For the first time since As You Sow began reporting on overpaid CEOs nine years ago, chiefs of tech giants Amazon and Apple made it to the list, occupying ninth and 10th spots.
The Seattle-based e-commerce giant paid its CEO Andrew Jassy, who took over the reins from founder Jeff Bezos in mid-2021, a total of $212.7 million. His excess pay component accounted for $197.3 million of the total. Apple CEO Tim Cook was paid $98.7 million in 2021, with $82.9 million in excess pay. Cook recently announced he would cut his pay by more than 40% for fiscal 2023.
The report identifies that CEO pay and its chasm relative to employee pay has been widening over the years. The average pay for the “100 Most Overpaid CEOs” for 2021 was $38 million higher by 30.6% from last year’s average. Furthermore, the total pay of CEOs at all the S&P 500 companies totaled $7.7 billion per year, of which nearly half the pay goes to the 100 of the CEOs included in As You Sow’s report.
“The continuous, exorbitant increases in executive compensation over the past four decades typify a rigged system that benefits the wealthy at the expense of workers, and the rest of us,” said Robert Reich, former U.S. Secretary of Labor, in a statement.
Shareholders at some companies have been effective in bringing about changes to executive pay, however. For instance, at the video games company Activision Blizzard, the CEO compensation was revised to about $830,000 in 2021 after over 44% of shareholders voted against CEO Robert Kotick’s pay package, which was over $150 million in 2020, the report highlighted. In October 2021, amid a controversy over the company’s response to a sexual discrimination lawsuit, Kotick asked that his total compensation be reduced to $62,500, the lowest amount California law allowed for someone earning a salary. He continues to earn the California minimum.
Representatives at Amazon and Apple did not immediately respond to Fortune for a comment.
Correction, Feb. 18, 2023: An earlier version of this article misstated the 2021 salary of Activision Blizzard CEO Robert Kotick. Fortune also added more detail about Kotick’s current salary.
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