Is the Boss Really Worth What They’re Paid? The Good and the Bad of CEO Salaries

Consumers and investors alike are starting to question just how responsible companies are when it comes to the environment, social or governance (ESG) issues. In line with this, sustainably-minded investors are questioning the sometimes over-inflated compensation packages that many CEOs are receiving.

Executive Compensation

When thinking about ESG (environmental, social and governance) issues, internal corporate behavior can sometimes take center stage. One part of corporate governance behavior is executive compensation. It is clear that CEO pay has been increasing at an alarming rate when compared to the average worker.  Is it warranted though?  In some cases, perhaps, but as you can see in this post, there are numerous examples of CEOs making millions when their shareholders are losing big.

According to a recent study put out by the Economic Policy Institute, chief executives at America’s 350 biggest companies were paid 231 times as much as the average private-sector worker in 2011. Unbelievably in 1978, CEOs took home only 26.5 times more than the average worker.

Granted, compensation for a job well done can be warranted, but many shareholders have lost value in their stock position while their CEOs pull in millions.  Some companies that have paid their CEOs lavishly while their stock price has plummeted include:

Company Last Close Daily Change 5-Year Return CEO Compensation
Abercrombie & Fitch Co (ANF) $43.71 -$0.12 -0.3% -41.5% $48,069,473
Apollo Group Inc (APOL) $18.68 +$0.05 +0.3% -73.7% $25,135,275
General Electric Co (GE) $20.68 +$0.06 +0.3% -44.4% $21,581,228
iStar Financial Inc (SFI) $7.74 +$0.15 +2.0% -70.9% $25,910,306
J C Penney Company Inc (JCP) $17.25 +$0.01 +0.1% -57.0% $53,281,505
Leucadia National Corp (LUK) $21.02 +$0.05 +0.2% -51.4% $28,145,138
Marathon Oil Corp (MRO) $31.50 $0.00 0.0% -44.0% $31,529,419
Motorola Solutions Inc (MSI) $53.87 +$0.01 0.0% -49.8% $29,329,052
PhotoMedex Inc (PHMD) $12.98 +$0.07 +0.5% -61.4% $28,284,287
Prudential Financial Inc (PRU) $51.13 +$0.35 +0.7% -44.5% $23,693,441
SandRidge Energy Inc (SD) $5.62 -$0.10 -1.7% -81.7% $25,261,50

Press “play” on Kapitall’s Compar-O-Matic to see how CEO compensation for the stocks listed above has changed in the past two years.

Is the Boss Really Worth What They’re Paid? The Good and the Bad of CEO Salaries

On the other end of the spectrum the following companies have some of the lowest compensated CEOs and have brought healthy 5-year returns to their investors:

Company Last Close Daily Change 5-Year Return CEO Compensation
Airgas Inc (ARG) $89.50 -$0.10 -0.1% +91.6% $2,092,489
Amazon.Com Inc (AMZN) $238.03 +$4.25 +1.8% +198.4% $1,681,840
AmerisourceBergen Corp (ABC) $40.85 +$0.05 +0.1% +87.7% $4,609,882
Autozone Inc (AZO) $381.87 +$0.74 +0.2% +262.3% $4,741,481
D.R. Horton, Inc. (DHI) $19.45 +$0.01 +0.1% +77.5% $4,003,807
Family Dollar Stores Inc (FDO) $68.83 -$0.06 -0.1% +210.0% $4,747,395
Fastenal Co (FAST) $40.77 -$0.14 -0.3% +113.4% $3,258,911
Fossil Inc (FOSL) $83.55 +$0.64 +0.8% +104.7% $0.00
Intuitive Surgical Inc (ISRG) $534.46 -$2.02 -0.4% +91.0% $4,548,559
O’Reilly Automotive Inc (ORLY) $91.55 +$0.18 +0.2% +195.3% $3,696,252
Public Storage (PSA) $144.29 -$0.24 -0.2% +93.1% $2,759,800
PulteGroup Inc (PHM) $16.83 +$0.08 +0.5% +81.9% $4,865,747

Press “play” on Kapitall’s Compar-O-Matic to see how CEO compensation for the stocks listed above has changed in the past two years.’

Is the Boss Really Worth What They’re Paid? The Good and the Bad of CEO Salaries

‘Tis the Season: CEOs in Retail

In light of this shopping season, below we can see which clothing retailers are returning shareholder value along with keeping CEO compensation to a minimum (Gap, Foot Locker) and also the companies who are poor performers when it comes to shareholder return and excessive CEO pay (JC Penney and Abercrombie and Fitch).

Using Kapitall Compar-O-Matic tool, here is a comparison of the CEO compensation against one-year returns on stock price in the retail sector:

Is the Boss Really Worth What They’re Paid? The Good and the Bad of CEO Salaries

This article was originally written by Dale Wannen, and posted on Kapitall.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!