March 18, 2020

Farient CEO Pay Ratio Tracker Update

Welcome to the second installment of Farient’s Pay Ratio Tracker™ update. Each week, we focus on the companies with the highest and lowest reported CEO-to median-employee pay ratios. This week, we explore the highs and lows of February’s pay ratio disclosure with Synnex Corporation (SNX) and EQT Corporation (EQT). As a reminder, the CEO to Median Employee Pay Ratio is one of the provisions from the 2010 Dodd Frank Wall Street Reform and Consumer Protection Act implemented in 2018.

Overseas Employees and Changes at the Top: CEO Pay Ratios of SYNNEX and EQT

SYNNEX: Overseas Employees Create Large CEO Pay Ratio

SYNNEX (SNX) is a $24 Billion, B2B information technology supply chain services company that helps its IT and consumer electronics clients with the distribution of products and client services. SNX had the highest pay ratio (788) of the 51 companies that released their pay ratio in February. This was in spite of their ratio dropping by 50% as compared to last year.

Why the Drop?

SYNNEX employs more than 220,000 people throughout North and South America, Asia-Pacific, Africa and Europe with 89% of their employees located outside of the United States. This explains the $7,871 pay for the median employee, an increase from $4,615 in 2019, a change not explained in the company’s proxy. Executive pay did drop by 14% in 2020 to $6.2MM which, when coupled with the 71% increase in median employee pay, created the year-over-year change in the CEO pay ratio.

EQT: Activist Investor and CEO Change Result in Outsized Impact on the Pay Ratio

EQT, the largest natural gas producer in the Appalachian Basin, saw its CEO pay ratio drop to 0 from 50 in 2019 after changes in the C-suite. In the lead-up to the annual general meeting last July, The Rice Team, an activist investor, agitated for change in board and executive leadership. The activist was ultimately successful, and Toby Rice took over as CEO. As part of that takeover, Mr. Rice agreed to take compensation of $1 for the first 12 months of his tenure. This created the CEO pay ratio of 0 reported in the February proxy.

If the former CEO’s 2019 total compensation of $13.2MM had been used in the pay ratio calculation, the ratio would have been 115. This is higher than the median ratio for the Energy sector in 2019, which was 88. The change in leadership undoubtedly had an outsized influence on the reported pay ratio for this year.

Farient’s Takeaway:

As noted in our previous Pay Ratio Tracker update, a company’s industry and business model have a significant impact on reported pay ratios. In the event that the company’s pay ratio number is not clear, investors should read the disclosures to understand details of the calculation. Clearly, for both SYNNEX and EQT, unusual events, particularly in EQT’s case, have had an outsized influence on the reported pay ratio.

Farient ‘s CEO Pay Ratio Tracker will provide updates on pay ratio, median employee and CEO pay throughout the proxy season. In addition, for real-time information on Say on Pay votes, please visit our Say on Pay Tracker™ at

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