CEOs who made a big show of cutting their salaries during the pandemic got extra equity that could make them even wealthier — and it shows how complicated executive compensation has become

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CEOs who made a big show of cutting their salaries during the pandemic got extra equity that could make them even wealthier — and it shows how complicated executive compensation has become
Gus Promollo delivers an order into a customer's trunk at Dick's Sporting Goods in Paramus, N.J., Monday, May 18, 2020.AP Photo/Seth Wenig
  • During the coronavirus pandemic, many top executives and CEOs took pay cuts as the financial fallout began.
  • But the pay cuts don't tell the full story of executive compensation during the pandemic.
  • Fan Fei and Andrew Edgecliffe-Johnson at the Financial Times report that one such CEO — Edward Stack of Dick's Sporting Goods — announced he would forgo his $1.1 million salary one day after he received more than 950,000 stock options.
  • By June 9, the value of that award reached $21.5 million in potential gains, according to the Financial Times — almost 20 times more than the salary Stack gave up.
  • The amount of equity Stack received was reportedly greater than he got in the last six years combined — and he's not the only CEO to receive extra stock-based rewards this year.
  • The Financial Times looked at 554 companies where executives' salaries were cut. It found that 51 had the same CEOs and awards program as 2019, and those CEOs, on average, received 52% more shares or options than the previous year.
  • As Business Insider's Andy Kiersz previously reported, many CEOs already get the bulk of their compensation from equity.
  • The Financial Times said many of the awards it looked at remained consistent with the timing and process of award grants in 2019, but it seems that some boards granted "substantially more stock or options."
  • That means that, if stocks rebound, executives awarded these increased grants would get "outsized gains" down the line.
  • Meanwhile, over 30 million Americans have filed for unemployment, and the unemployment rate is 13.3%.
  • The National Bureau of Economic Research announced on Monday that the United States fell into a recession in February; that was the end of the "historic" 128-month economic expansion that kicked off in June 2009.
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