Equilar | Associated Press CEO Pay Study: Record Year for S&P 500 Leads to Record Pay for Top Executives

May 28, 2021

Dan Marcec


2020 was unusual, unexpected and challenging throughout the global economy. Yet, the S&P 500 showed steady and solid growth, ultimately reaching a record high on the final day of the year. Given the relationship of executive compensation to the stock market, CEO pay climbed at S&P 500 companies in 2020. Median total compensation for executives included in the annual Equilar | Associated Press CEO Pay Study totaled $12.7 million, a record high in the report’s history.

Since 2011, Equilar has worked together with the Associated Press on annual CEO pay studies. The most recent edition identified trends in compensation awards for CEOs who served in their positions at an S&P 500 company for at least two years as of fiscal year end 2020. Companies must have filed a proxy between January 1 and April 30, 2021 to be included in this study. Overall, these parameters resulted in the inclusion of 342 executives.

Please see below for additional findings and highlights. Equilar is also conducting research in conjunction with the Associated Press on the largest CEO pay packages awarded to companies in each individual state, regardless of size or index classification, which will be released in the coming weeks.

Key Findings

CEO Pay Increased 5%, Continuing Annual Growth

Despite a tumultuous year, total compensation continued to rise for S&P 500 CEOs. Median total compensation* for executives in this year’s study increased 5%, reaching $12.7 million. This growth was slightly higher than a 4.1% increase reported in the 2019 study. The annual Equilar | AP study has found CEO pay growing consistently over the past five years.

Because equity compensation drives CEO pay values, a hot market influences larger awards. Long-term incentive packages consisting primarily of stock and options awards are the primary form of CEO compensation, and the figures reported to the Securities and Exchange Commission (SEC) are valued in their entirely on the date they are granted, even if the award is not available to the executive for years, if it is earned at all.

Median salary for S&P 500 CEOs in the study decreased by 2.5% in 2020, and annual cash bonuses were down 9.1%. This reflects amounts actually earned in the past year, showing that the pandemic did in fact have a meaningful effect on compensation values, even if the total figures show larger gains as a result of SEC reporting guidelines and the forward-looking nature of executive equity awards.

Employees Saw Wages Increase, Just Not As Much As CEO Pay

Companies are required to report compensation for their median employees alongside CEO pay each year, expressed as a ratio showing the difference between the two figures. The median employee pay disclosed by S&P 500 companies in the study was $72,670 in 2020, up 2% from $71,276 in fiscal year 2019. However, with CEO pay seeing a larger increase, the median CEO Pay Ratio rose from 167:1 to 172:1.

Top-paid S&P 500 Chiefs Remain Consistent 

Four of the 10 highest-paid CEOs in this year’s study appeared in the top 10 in 2019 — Shantanu Narayen, Reed Hastings, David Zaslav and Brian Roberts. Robert Kotick, Leonard Schleifer and Thomas Rutledge have appeared among the top 10 in the recent past as well. 

Long-term incentive plans contingent on performance targets have become increasingly common, which is a key reason pay packages have continued to rise overall. For example, Chad Richison, the highest-paid executive in this year’s study, received a stock grant intended to pay out over a 10-year period, which is entirely at risk if goals are not achieved. In addition, according to the company’s filing (p.41), “Mr. Richison will not be eligible to receive any additional long-term incentive awards, including any equity or equity-based compensation awards, through the end of 2025.”

Given that the CEOs in the Equilar | AP CEO Pay Study are tenured executives, having been in their respective positions since at least January 2019, there are no outlier pay packages for new CEOs receiving large, one-time grants for having just joined the company or CEOs of newly public companies that receive significant shares as a reward for taking the company to market, as often appear in annual “highest-paid” studies.


Industry Gains (and Losses) Show COVID’s Impact

For the second straight year, the communications services industry had the highest median CEO pay, totaling $19.1 million among the 13 companies included in that sector. Meanwhile, the consumer defensive industry saw the largest gain, with the median CEO pay increasing 20.3% from $14.1 million in 2019 to nearly $17 million in 2020. That sector, which includes food, beverage, household and personal products manufacturing, packaging, tobacco, and education and training services, among others, saw increased demand during the pandemic, which bolstered its CEOs fortunes. 

Notably, the median cash bonus was well over $3 million in each of these sectors ($3.6 million for communications services and $3.4 million for consumer defensive). No other industry saw a median cash bonus higher than $2.2 million.

The energy and healthcare sectors saw significant declines in CEO pay, with energy falling 10.2% and healthcare down 8%, consistent with the challenging year these industries saw during the pandemic. Healthcare, which includes biopharma companies, had historically reported the largest CEO pay packages in the Equilar | AP study prior to 2019, when it slipped to second, falling one spot further in 2020.


Women Outpace Men in Total Pay but Continue to Be Underrepresented

Among the 342 executives included in this year’s study, 16 were women. That was four fewer than in 2019, which saw a record number of women (20). At the median, women CEOs were awarded $13.6 million in 2020, as compared to $12.6 million for the 326 men included in the study.

Lisa Su of Advanced Micro Devices was the highest-paid woman for the second straight year. In fact, she was the highest-paid executive overall in last year’s study — the first woman ever to hold that position.


*Total compensation includes information disclosed in company proxy statements including salary, bonus, stock and options valued at grant date, any deferred compensation, and other compensation (including benefits and perks).


Dan Marcec

Senior Editor at Equilar

Dan Marcec, Senior Editor at Equilar, authored this post. Virginia Callison, Andrew Gordon, Charlie Pontrelli and Kristen Tang conducted the data and analysis for this study. Please contact Amit Batish, Director of Content and Communications, at abatish@equilar.com for more information or commentary on Equilar research and data analysis.


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