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C.E.O. Pay Remains Stratospheric,
Even at Companies Battered by Pandemic
While millions of people struggled to make ends meet,
many of the companies hit hardest in 2020
showered their executives with riches.
April 24, 2021
The New York Times
By David Gelles
Boeing had a historically bad 2020. Its 737 Max was grounded for
most of the year after two deadly crashes, the pandemic decimated its business,
and the company announced plans to lay off 30,000 workers and reported a $12
billion loss. Nonetheless, its chief executive, David Calhoun, was rewarded with
some $21.1 million in compensation.
Norwegian Cruise Line barely survived the year. With the cruise industry at a
standstill, the company lost $4 billion and furloughed 20 percent of its staff.
That didn’t stop Norwegian from more than doubling the pay of Frank Del Rio, its
chief executive, to $36.4 million.
And at Hilton, where nearly a quarter of the corporate staff were laid off as
hotels around the world sat empty and the company lost $720 million, it was a
good year for the man in charge. Hilton reported in a securities filing that
Chris Nassetta, its chief executive, received compensation worth $55.9 million
The coronavirus plunged the world into an economic crisis, sent the U.S.
unemployment rate skyrocketing and left millions of Americans struggling to make
ends meet. Yet at many of the companies hit hardest by the pandemic, the
executives in charge were showered with riches.
The divergent fortunes of C.E.O.s and everyday workers illustrate the sharp
divides in a nation on the precipice of an economic boom but still racked by
steep income inequality. The stock markets are up and the wealthy are spending
freely, but millions are still facing significant hardship. Executives are
minting fortunes while laid-off workers line up at food banks.
“Many of these C.E.O.s have improved profitability by laying off workers,” said
Senator Elizabeth Warren, Democrat of Massachusetts, who has proposed new taxes
on the ultrawealthy. “A tiny handful of people who have shimmied all the way to
the top of the greasy pole get all of the rewards, while everyone else gets left
For executives who own large stakes in giant companies, the gains have been even
more pronounced. Eight of the 10 wealthiest people in the world are men who
founded or ran tech companies in the United States, and each has grown billions
of dollars richer this year, according to Bloomberg. Jeff Bezos, the founder of
Amazon, which saw profits skyrocket with people stuck at home, is now worth $193
billion. Larry Page, a Google co-founder, is worth $103 billion, up $21 billion
in the last four months alone, as his company’s fortunes have only improved
during the pandemic.
And, according to security filings, a select few are rapidly accumulating new
fortunes. Chad Richison, founder and chief executive of an Oklahoma software
company, Paycom, is worth more than $3 billion and was awarded $211 million last
year, when his company made $144 million in profit. John Legere, the former
chief executive of T-Mobile, was awarded $137.2 million last year, a reward for
taking over the rival Sprint.
“We’ve created this class of centimillionaires and billionaires who have not
been good for this country,” said Nell Minow, vice chair of ValueEdge Advisors,
an investment consulting firm. “They may build a wing on a museum. But it’s not
infrastructure — it’s not the middle class.”
The gap between executive compensation and average worker pay has been growing
for decades. Chief executives of big companies now make, on average, 320 times
as much as their typical worker, according to the Economic Policy Institute. In
1989, that ratio was 61 to 1. From 1978 to 2019, compensation grew 14 percent
for typical workers. It rose 1,167 percent for C.E.O.s.
The pandemic only compounded these disparities, as hundreds of companies awarded
their leaders pay packages worth significantly more than most Americans will
make in their entire lives.
“To my mind, they’re the logical consequence of our total embrace of shareholder
capitalism, starting with the corporate raiders of the 1980s, to the exclusion
and sacrifice of all else, including American workers,” said Robert Reich, a
labor secretary under President Bill Clinton. “The pay packages reflect soaring
share prices, which in turn reflect, at least in part, the willingness if not
eagerness of corporations to cut payrolls at the slightest provocation.”
AT&T, the media conglomerate, lost $5.4 billion and cut thousands of jobs
throughout the year. John Stankey, the chief executive, received $21 million for
his work in 2020, down from $22.5 million in 2019.
T-Mobile said it would create new jobs through its merger with Sprint, but has
already begun layoffs. It made $3.1 billion in 2020. In addition to Mr. Legere’s
windfall, the company awarded its current chief executive, Mike Sievert, $54.9
Tenet Healthcare, a hospital chain, furloughed about 11,000 workers during the
pandemic, but made nearly $399 million in profit. “The last 12 months clearly
have been an extraordinary challenge and learning experience,” the company’s
chief executive, Ronald Rittenmeyer, wrote in a filing with the Securities and
Exchange Commission. In the same document, Tenet revealed that Mr. Rittenmeyer
earned $16.7 million last year.
And L Brands, the owner of Victoria’s Secret, cut 15 percent of its office staff
and temporarily closed most of its stores during the pandemic. Andrew Meslow,
who took over from Leslie H. Wexner as chief executive in February last year,
still earned $18.5 million.
“They always talk about how their employees are the most important assets,” Ms.
Minow said. “But they sure don’t treat them that way.”
Dozens of public companies have already reported paying their C.E.O.s $25
million or more last year, according to Equilar, an executive compensation
consulting firm. Several companies that announced major layoffs last year,
including Comcast and Nike, have not yet released executive compensation data
for last year.
Many companies defended their executive compensation plans. In some cases,
C.E.O.s took less than they were entitled to. Most top executives receive the
bulk of their pay in shares, which may decrease in value and often vest over
several years. And at many companies, the stock price was up despite the
turbulence in the economy and regardless of whether the company was profitable.
“At the end of the day, C.E.O.s end up getting rewarded for how they respond to
these external occurrences,” said Jannice Koors, a compensation consultant at
Pearl Meyer who works with companies to determine executive pay. “If you think
about stores closing, furloughs, etc., C.E.O.s are getting rewarded for making
In many ways, the role of corporate chieftains has never been more pronounced.
Beyond running their businesses, C.E.O.s have emerged as prominent voices in the
national conversations around race, climate change and voting rights.
At the same time, they face critics on all sides. Senator Mitch McConnell
recently told companies protesting Republican efforts to overhaul voting laws to
“stay out of politics.” Meanwhile, labor advocates are calling on companies to
take better care of their workers.
“It’s time for the corporations in this nation to play their part in a recovery
that can be shared by everybody,” said Mary Kay Henry, international president
of the Service Employees International Union. “We cannot reinforce the economic
inequality that existed before the pandemic.”
“We cannot reinforce the economic inequality that existed before the pandemic,”
said Mary Kay Henry, president of the Service Employees International
Union.Credit...Guerin Blask for The New York Times
Executives at publicly traded companies receive most of their compensation in
stock, an arrangement intended to align pay with the performance of a company’s
share price. When the stock price goes up, the theory goes, investors and
executives alike share in the gains.
Defying logic, the stock market has been soaring for months now, more than
making up the losses it suffered early in the pandemic. As a result, many chief
executives ended the first year of the pandemic having overseen, improbably, a
rise in their company’s share price. The resilience of the markets, and the
sense that Covid-19 was an act of God, not the fault of any one person, helped
companies justify big pay packages.
“Boards were thinking: ‘This isn’t our management team’s fault. This isn’t the
result of bad planing or lax governance. This kind of happened to everybody,’”
Ms. Koors said. “There was a sense in board rooms that if, despite all this,
they managed to deliver on the numbers, who are we to cut those payments in a
year when everyone worked their butts off?”
Some investors and corporate governance groups are pushing back on executive
Starbucks shareholders voted last month against the compensation plans for the
company’s two top executives. The resolution was nonbinding, however, and the
chief executive, Kevin Johnson, received $14.7 million in cash and stock last
The biggest clash over pay this year is at General Electric, a company still
reeling from years of mismanagement. Larry Culp, the chief executive, received
$73.2 million last year and could collect well over $100 million more, thanks to
a recently updated pay plan. Several prominent corporate governance groups have
come out in opposition to Mr. Culp’s pay, and investors will vote on the issue
at G.E.’s annual meeting next month.
Even when executive pay was slashed, it often remained high. Robert A. Iger, the
chairman of the Walt Disney Company, last year earned less than half what he did
in 2019, but his compensation was still $21 million. The pay cut was a
reflection of the difficult year at Disney, which laid off more than 28,000
people as its theme parks shut down.
At Boeing, Mr. Calhoun voluntarily gave up most of his cash salary this year,
taking just $269,231 of the $1.4 million he was entitled to. Still, thanks to
stock awards, his compensation was more than $21 million.
“Dave obviously gave up a lot,” a Boeing spokesman said in an email.
A Hilton spokesman said the $55.9 million figure reported in the company’s
annual filing did not reflect Mr. Nassetta’s actual pay. Because of the
pandemic, Hilton restructured several complex stock awards. As a result, Mr.
Nassetta’s actual earnings for 2020 will be closer to $20.1 million, a slight
decrease from 2019.
“2020 was an anomaly in so many ways,” the spokesman said in an email.
David Gelles is the Corner Office columnist
and a business reporter.
A version of this article appears in print
on April 25, 2021, Section A, Page 1
of the New York edition with the headline:
Despite Losses, C.E.O.s Prosper Amid Pandemic.
C.E.O. Pay Remains Stratospheric,
Even at Companies Battered by Pandemic,
April 24, 2021,
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