Cashing in on the pandemic: the five highest-paid US executives in 2021
Expedia boss tops the list which also features Apple’s Tim Cook
A recent Wall Street Journal analysis shows that in 2021, top S&P 500 executives achieved record pay for the sixth consecutive year in a row. The median amount taken home by the highest earners was $14.7 million.
Consisting largely of shares and stock options, these executive pay packets demonstrate who benefited from the recovery in sales and profits and the rise in the stock market following the first year of the Covid-19 pandemic.
Expedia’s Peter Kern the overall winner
With the highest earnings of them all, Expedia CEO Peter Kern is an exemplary case of how the pandemic stock market has rewarded top company executives. As vice president of the company, former media boss and venture capitalist Kern earned $42 million in 2021, mainly in shares. Expedia shares on February 21, 2020 were trading at $120 each; they plummeted in the following two months as Covid-19 took hold of the globe. Kern was appointed sole CEO of the company while in full lockdown. Shares fell to $61 each and then, like the rest of the market, began to recover as the months went on.
Expedia’s board approved Kern’s CEO compensation package in February 2021, with the share price at $157. Stocks continued to rise that year, closing at $180. They currently stand at around $120-125. In other words, shareholders are in the same place as two months before the appointment, but the CEO has become the best-paid executive in the US.
Specifically, 54-year-old Kern’s compensation consisted of $850,000 in cash salary, $830,000 in other compensation (including $90,000 for personal use of the company plane) and two large stock and option packages: $157 million in shares and another $137 million in options. Most of the compensation is deferred and payment will not begin until 2024, according to the report.
The company says Kern’s salary is justified by the commitment he showed in “a period of great uncertainty for the company and the travel industry” in the first years of the pandemic; also citing his leadership in establishing a platform operating model, a cost savings program to mitigate the stoppage in travel and his generally prudent management of the balance sheet.
David Zaslav of Discovery at number two
The second highest-paid executive of 2021 was David Zaslav, 62, president and CEO of Discovery, the communication and entertainment group that has integrated WarnerMedia.
Following the merger, the company signed Zaslav to a generous six-and-a-half-year contract with a fixed salary of $3 million a year, a $22 million benchmark bonus and an additional $12 million in stock incentives.
In addition, he received a welcome/retention bonus of stock valued at $203 million; a multi-year package whose final quantification will depend on the evolution of shares on the stock exchange.
Zaslav’s final bill for 2021 (which also includes $774,000 for personal use of the company plane, escorts and security expenses and car at his disposal) amounted to $246 million.
More winners at ServiceNow, Apple, JP Morgan
ServiceNow, the cloud computing giant valued at $85 billion, also offered an irresistible package to William McDermott, whom it signed from SAP. In just over two years, McDermott, 60, has earned $231 million. If this welcome salary of $41 million in 2019 was not bad at all, indeed complemented by another $25 million in 2020; McDermott’s package broke records last year with his total compensation valued at $165.8 million. Again, most of those amounts are made up of company shares and stock options.
Apple boss Tim Cook, 61, received a huge stock incentive in 2011 when he took the reins of the company. Having missed out on top pay positions for a few years, even within his company, in 2021 he was compensated. Cook earned $98.7 million, of which $3 million was his salary, $12 million cash incentives and $82 million in shares. There’s just over a million that includes, among other things, $712,000 for personal use of the company plane. Since 2017, Apple has had Cook use a private plane for all personal and business trips for reasons of efficiency and safety.
To be sure, Apple has a long list of executives on multi-million dollar salaries. Financial director Luca Maestri; legal counsel Kate Adams; chief of staff and retail business Deirdre O’Brien and chief operating officer Jeff Williams each earned $27 million in 2021, according to public information filed by the company.
The fifth position according to public company information is held by 66-year-old Jamie Dimon, chief executive of JP Morgan. His compensation in 2021 was $84.4 million. A package of $52.6 million in stock options made the difference from the previous year.
Dimon’s number two, Daniel Pinto, 57, also became one of the highest paid managers with a $53 million package, thanks to the special stock option plan for Dimon and him. Indeed, Pinto’s salary exceeds that of the vast majority of CEOs of other companies.
The list of the highest-earning S&P 500 CEOs is completed by Jay A. Snowden, of Penn National Gaming, with $65.9 million; Hock Tan, of Broadcom, with $60.7 million; Fleetcor’s Ronald Clarke, at $57.92 million, and Glenn Fogel, of Booking Holdings, with $54 million. Thomas Rutledge, CEO of Charter Communications, comes in at number 10 with $41.9 million.