Santeri Viinamäki, CC BY-SA 4.0, via Wikimedia Commons

It’s hard out there for a boss—particularly if by “boss” we mean the CEO of a large publicly listed US corporation.

Last year, an Economic Policy Institute (EPI) study of CEO pay at the 350 largest US firms found average annual compensation in 2019 totaled $21.3 million. But as a recent report from the nonprofit Institute of Policy Studies (IPS) reminds readers, most of that compensation is variable, as direct salary makes up on average “only 10 percent of executive compensation.” The other 90 percent is mainly in the form of stock options or other forms of bonuses.

This payment structure means that should a crisis occur—say, a global pandemic like COVID-19—CEOs might find their compensation in a down year falling through no fault of their own from eight-digit to seven-digit territory.

Today, we know most companies’ stock values went up during the pandemic. But corporate boards did not know this would be the case. And so, in 51 of 100 corporations analyzed by IPS researchers, based on the public filings of leading corporations with the US Securities and Exchange Commission (SEC), corporate boards altered their compensation policies during COVID-19 to shield leading executives from the potentially negative impact of the pandemic on their 2020 earnings.

Meanwhile, protecting frontline workers generated considerably less corporate board attention. As it happens, for the 100 companies the IPS report analyzed, average worker pay fell two percent, while CEO pay increased 29 percent.

Back during the nation’s first Gilded Age, the author F. Scott Fitzgerald famously wrote, “Let me tell you about the very rich. They are different from you and me.” The IPS report is a reminder that the same thing is true today in our second Gilded Age.

The IPS report, with the catchy title Pandemic Pay Plunder, is authored by Sarah Anderson and Sam Pizzigati and is the 27th of an annual series of the nonprofit’s “Executive Excess” reports. Back in 1994, the first year the report was issued, CEO compensation reportedly averaged $1.9 million—less than one tenth of today’s figure. Ironically, a law advocated by President Bill Clinton in 1993, which capped the amount of executive salary that can be deducted from corporate income tax at $1 million, helped push up compensation by encouraging outsized stock option awards in lieu of direct salary. Anderson and Pizzigati note that today the ratio of CEO pay to worker pay in the US is 15 times greater than what prevailed in the 1960s.

These days, in fact, it is not exactly news that corporate CEOs take home hundreds of times—or even thousands of times—more than the median worker does at their companies. To cite some numbers quickly: in 2020, Walmart’s CEO earned 1,078 times median worker wages at that firm. At Amazon in 2020, the company’s “worldwide consumer” CEO David Clark took home $46.3 million, 1,596 times what the median Amazon employee earned.

Amazon, of course, at least was flush, having enormously benefitted from the pandemic as many consumers shifted their purchasing from brick-and-mortar stores to online. More newsworthy, however, is how many companies that did not benefit from the pandemic twisted their own internal rules to protect executive compensation.

For their report, the IPS research team reviewed the annual SEC filings made by publicly listed companies in the US. They focused on 100 firms with the lowest median wages that fall within the Standard & Poor’s index of the nation’s 500 largest companies (by market value). The firms include many household names, including Under Armour, Gap, Kohl’s, Nike, AutoZone, Estée Lauder, and many others.

Among the highlights—or lowlights—offered in the report, are the following:

  • Carnival: Due to the pandemic, cruise lines shut down, and industry-wide tens of thousands of workers were stranded on ships for months. Carnival’s board, however, saw fit to award company CEO Arnold Donald with pandemic “