United Kingdom

Half of 100 largest US employers of low-wage workers 'rigged' CEO pay

Of the 100 S&P 500 firms with the lowest median worker wages, 51 bent their own rules in 2020 to pump up executive paychecks, according to a new study.

The study from the Institute for Policy Studies found that at those 51 companies, the average CEO pay rose 29 percent last year, to $15.3 million, while worker wages dropped 2 percent.

The report found that CEOs at the companies made on average 830 times more than workers, and the left-leaning think thank is calling for measures to reign in extreme pay gaps, including a tax based on the size of the difference between CEO and worker pay.

While many CEOs publicly pledged to take pay cuts during the pandemic last year, the study found that some quietly made up the difference with bonuses, in some cases while they slashed worker pay and laid off employees. 

Auto parts maker Aptiv 'manipulated bonus metrics' to boost CEO Kevin Clark’s (left) compensation to $31.3 million, while Chipotle 'inflated' CEO Brian Niccol's pay to $38 million

According to the study, auto parts maker Aptiv has the widest pay gap between CEO and average worker.

'By manipulating bonus metrics, the board pumped up CEO Kevin Clark’s compensation to $31.3 million, 5,294 times the company’s $5,906 global median worker pay,' the authors said.

At Chipotle Mexican Grill, CEO Brian R. Niccol made $38 million in 2020 — a 136 percent raise over his 2019 compensation, and 2,898 times as much as the company’s median worker pay of $13,127. 

'The board inflated his bonus by tossing out its poor financial results from the shutdown and excluding some COVID-19-related costs from his performance evaluation,' the study found. 

A spokeswoman for Chipotle told DailyMail.com in a statement: 'Brian Niccol’s annual compensation package is based on a competitive analysis of CEO pay levels within our peer group and is designed to pay for performance.' 

'Under Brian’s leadership, Chipotle’s stock has increased more than 300% and the market cap grew $30.6 billion, from $8.2 billion in early 2018 to $38.8 billion at the end of 2020,' the statement added.

A spokeswoman for Chipotle told DailyMail.com in a statement: 'Brian Niccol’s annual compensation package is based on a competitive analysis of CEO pay levels within our peer group and is designed to pay for performance' (file photo)

The company pointed out that without the one-time bonus paid to Niccol last year, the CEO's pay was only 1,129 times that of the average worker. 

On Monday, Chipotle announced that it is increasing restaurant wages resulting in a $15 average hourly wage by the end of June.

Dollar Tree's new CEO Michael Witynski got a bonus valued at about $1.5 million, boosting his total compensation to $11.3 million

The company says that 84 percent of its employees are 25 or younger, and that the company provides many opportunities for rapid advancement. 

At the discount retail chain Dollar Tree, executives failed to meet their 2020 bonus targets, the Dollar Tree board awarded them restricted stock grants with approximately the same value, the study found. 

Dollar Tree's new CEO Michael Witynski, who spent less than six months in the top post in 2020, got a bonus valued at about $1.5 million, boosting his total compensation to $11.3 million, the study claims.

That’s 715 times as much as the pay for the company’ median worker, a part-time U.S. store employee who earned $15,816, the study found.

A spokeswoman for Dollar Tree disputed the findings, saying top executives actually did meet their original 2020 bonus requirements, at the maximum level.

'The Board decided to pay a portion of the earned bonuses in stock, instead of all in cash. The stock portion for Mr. Witynski was $1.08 million, not $1.5 million,' the spokeswoman said in a statement to DailyMail.com.

'Additionally, in 2020 during the pandemic, the Company paid $248.4 million in premium pay or bonuses to store and distribution center associates and managers, the majority of which are women and people of color,' she added. 

Likewise, Coca-Cola's top executives did not meet their bonus targets last year, but the Coca-Cola board gave them all bonuses anyway, according to the study.

Coca-Cola CEO James Quincey's $960,000 bonus, combined with new stock-based awards, drove his total compensation package above $18 million

For Coca-Cola CEO James Quincey, that $960,000 bonus, combined with new stock-based awards, drove his total compensation package above $18 million, over 1,600 times as much as the company’s typical worker pay, the study said.

In December 2020, Coca-Cola announced plans to cut about 2,200 jobs, or 17 percent of its workforce. Coke profits dropped by 13 percent last year. About 1,200 of the layoffs will hit U.S. workers.

A spokesman for Coca-Cola referred an inquiry from DailyMail.com to the company's annual statement to shareholders, which said in part that the board 'considered management’s performance in light of COVID-19, taking into account performance against the pre-established targets, performance against peers, overall organizational health, and leadership in the face of unexpected challenges.'

The statement added that the special one-time bonus was 'appropriate based on improved performance trends in the second half of the year.' 

A spokesperson for Aptiv did not immediately respond to a request for comment from DailyMail.com on Tuesday. 

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