As millions of American workers struggle with stagnant wages, pay for CEOs of the country’s largest companies continues to climb higher. While some economists cite competition for the best talent and the vast responsibility that comes with leading a corporation as explanations for higher executive pay, there is evidence that some CEOs are paid more than they are worth.
A new report from the nonprofit As You Sow, which promotes environmental and social corporate responsibility, takes a close look at CEO pay. Using a regression analysis that ties CEO pay to performance and other indicators such as the portion of pay that’s offered in options and returns on corporate capital, As You Know has determined which CEOs are paid above and beyond their performance.
The year’s report cites Leslie Moonves, CEO of CBS, as the most overpaid chief executive in the country. Moonves earned compensation worth $56.7 million in 2016. Marc Benioff of Salesforce.com ranks second on the list, with total compensation of $33.4 million. Discovery Communication’s David Zaslav comes in third, with compensation of $32.4 million.
Not only are many of the CEOs on the list overpaid, but the report argues that their companies underperformed the S&P 500 last year, so they may also be a drag on shareholder returns. Among the top 25 overpaid CEOs on the list, 15 were appearing on it for a second time, and 10 of them have been on the list three times.
As You Sow calls out mutual funds in the report for failing to act as a curb on executive pay. “Shareholders, especially those with fiduciary responsibilities, need to continue to heavily scrutinize executive pay packages and exercise their rights to vote with authority.”