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.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

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!