August 26, 2019
The Wall Street Journal – The New Pay Gap: What Firms Report Paying CEOs Versus What They Take Home
By Theo Francis
Big companies tend to pay their chief executives big bucks—that much is widely known.
Less familiar: Many of those CEOs wind up receiving much more, often well after the compensation is initially disclosed.
The $190 million that Oracle Corp. (ORCL +1.06%) reported paying co-CEO Mark Hurd over three years was valued at $535 million by the end of that period. At consulting firm Gartner Inc., (IT -0.42%) $33.6 million of pay for Eugene Hall swelled to $65.7 million. The $53 million McDonald’s Corp. (MCD +0.33%) reported paying Stephen Easterbrook grew to about $85 million.
These gains are driven in part by a robust stock market, which has driven up the value of executive equity awards, but also by intricate pay structures that can multiply the number of shares and options those awards ultimately provide.
The Wall Street Journal compared what S&P 500 companies reported paying their CEOs over three years with a measure of what that pay was worth at the end of the period, called realizable pay, using data from ISS Analytics, the data intelligence arm of proxy adviser Institutional Shareholder Services. (For more information, see the methodology note at the end of this article.)
On average, the value of the pay at the end of the period was 16% higher than originally disclosed. Pay rose at three out of five companies. And at a third of companies, pay rose by more than 25%.