Salaries declined as CEOs showed solidarity with workers, but stock compensation surged.
Good morning.
CEO salaries declined in 2020, as companies enacted cuts to preserve liquidity and show solidarity with workers. But those cuts were offset by surging stock compensation, fueled by a rising stock market. The end result: median CEO pay for S&P 500 CEOs rose slightly—about 2.5%—while median pay for Russell 3000 CEOs was down barely, 0.1%.
That’s the finding of an annual study by The Conference Board, along with ESGAUGE and Semler Brossy, that comes out later this morning and is the most comprehensive look at CEO pay I’m aware of. You can find the full study here, but I’ll share two other data points:
• Median salaries among S&P 500 CEOs fell 4.2%, and median salaries among Russell 3000 CEOs fell 6.4%.
• Stock options soared as a share of CEO pay, accounting for 19.1% of total pay in 2020, up from 11.1% in 2019.
Meanwhile, PepsiCo today become the latest company to unveil a significant acceleration in its sustainability policies, announcing what it calls a “strategic, end-to-end transformation” that puts “sustainability at the center of how the company will create growth and value.” Among other things, the plan will lead to net zero emissions by 2040, net water ‘positivity’ by 2030, and a 50% reduction in the use of virgin plastic per serving by 2030.
I discussed the initiative with CEO Ramon Laguarta yesterday, who insisted this “is not a sustainability program. It’s a strategic transformation of what we do and how we do things at PepsiCo.” He said it is “based on consumer dynamics we are seeing in many parts of the world…We are seeing consumers even more aware of the challenges we have in society and with the planet than they were two or three years ago.” And it is also driven by employees: “The leadership team…feels very passionate about this… And our associates are asking more from us.”
Also yesterday, Stanley Black & Decker announced a five-year, $25 million commitment to fund vocational skills training in construction and manufacturing. CEO Jim Loree talks about it in an interview with Susie Gharib, here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Chinese economy
Chinese retail growth slowed significantly last month, in the context of strict pandemic measures. Growth was 2.5% in August, versus 8.5% in July—it's been slowing down every month since March's monthly high of 34.2%, with other factors including supply chain bottlenecks, flooding disruptions, and rising raw material costs. Fortune
Macau scrutiny
Chinese officials want to tighten restrictions on casinos in Macau, the only place in the country where gambling is legal. This latest demonstration of Chinese regulatory clampdown sent Macau's top gaming stocks tumbling, with companies losing a record $14 billion in combined market value today. Fortune
Gensler SOS
SEC Chair Gary Gensler has asked Congress for more resources to help the agency oversee the cryptocurrency sector. "Funding-wise, we could use a lot more people," he told a Senate banking committee hearing, adding that there are 6,000 projects in the space, many of which qualify as securities. Fortune
WFH pay
A new report from PayScale shows 69% of HR executives say they are not considering lowering pay for employees who mostly or permanently work from home. Meanwhile, a quarter of employees are expected to keep working from home even after the pandemic eases. Fortune
Responsible digital transformation How can financial services organizations position themselves to thrive in the next phase of their digital transformation journey? Explore Deloitte’s considerations for designing transformation efforts to benefit all stakeholders and achieve broader goals, not just financial ones. Read more
Instagram toxicity
Researchers inside Facebook-owned Instagram are well aware that the platform has negative effects on teenage girls, changing how they view and describe themselves, and leaving some with suicidal thoughts. That's despite Facebook playing down such effects in public, even claiming that its apps have mental-health benefits. Wall Street Journal
Productivity tips
This year's Fortune 40 Under 40 have some productivity tips for you: plan your time, define your goals, hit the ground running, cut out the noise, set deadlines, and don't forget to take a step back. Also, here's some career advice from this year's cohort. Fortune
New iStuff
Apple had its annual unveiling of iOS devices yesterday, and here's the rundown: slightly upgraded iPhones with no price rises and a slightly smaller notch; a new Apple Watch with a bigger screen; new iPads with new video-calling camera features; and an updated Apple Fitness+ subscription service. Fortune
Next COVID
A new Singaporean study suggests 400,000 people on average get infected by animals carrying coronaviruses each year. Most go unrecognized due to mild or non-existent symptoms, and human-to-human transmission is rare, but the potential is still there for COVID-style viral adaptation. Fortune
This edition of CEO Daily was edited by David Meyer.
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