Hollywood's Top CEOs See Compensation Fall 5 Percent in 2012
Whether intentional or not, some observers have noted that the pay cuts of many media-conglomerate CEOs come at a fortuitous time, when several broadcasters – including those in the conglomerates' own news divisions -- have disparaged the gap between rich and poor, in particular the pay scales of rank-and-file workers compared with CEO compensation.
Some of the ammunition for such news stories come from the AFL-CIO, which has authored position papers against massive wage gaps. At its website, it features an ever-changing scroll that compares hourly salaries. On Monday, for example, it pointed out that the average worker in America makes $19.77 an hour, while Disney CEO Robert Iger makes about $13,340 an hour.
Disney’s Iger, though, could be seen as a bargain compared with other CEOs, given his pay rose only 20 percent in fiscal 2012 while the stock surged 76 percent. Disney is also the second most profitable of the entertainment conglomerates, hauling in $5.7 billion last year, up 18 percent from the prior year (Comcast’s profit in 2012 was $6.2 billion).
On a list of the highest paid CEOs among S&P 500 companies, Iger is No. 10, having earned less than both Zaslav (No. 7) and Moonves (No. 3), even though Disney is more profitable and its stock outperformed both.
The two executives who earned more than Moonves in 2012 were Oracle’s Larry Ellison ($96.2 million) and Google’s Eric Schmidt ($101 million).
All the biggest media companies are on the AFL-CIO list: Dauman is No. 19, Murdoch is No. 27, Comcast CEO Brian Roberts is No. 30, and Time Warner CEO Jeff Bewkes is No. 42.
Despite Disney’s success, Iger has his share of detractors who complain his pay is too generous. ISS, for example, continues to push for a shareholders’ say-on-pay and argues that Iger’s contract is such that he’ll still make huge money even if Disney delivers mediocre performance.
Time Warner chairman and CEO Jeff Bewkes, meanwhile, saw his 2012 pay remain virtually unchanged at $25.9 million. The stability of his earnings came despite a stock improvement of 36 percent last year and earnings growth of 5 percent. Bewkes' stock awards amounted to $6.9 million, up from $6.1 million in 2011, but his option awards declined from $3.96 million to $2.96 million.
Of the seven conglomerates, two saw their pay increase (Roberts and Iger), one was stagnant (Bewkes) and three CEOs took pay cuts in 2012 – Dauman, Moonves and Murdoch. Sony has yet to report.
Murdoch earned $30 million in fiscal 2012, down 10 percent from the year prior while the company’s profit fell 57 percent but the stock rose 26 percent.
Like Iger, Roberts is also seen in some circles as a relative bargain. He earned $29.1 million in 2012, up 8 percent from a year before, as profit surged 49 percent and the stock rocketed 61 percent.
Whether some CEOs taking a pay cut in 2012 is a trend that might continue in 2013 remains to be seen. The AFL-CIO and other progressive activists argue they can certainly afford to, given that the average CEO at a Fortune 500 company made $12 million in 2012 while at the seven media conglomerates (again, substituting Discovery for Sony) the average CEO made $38.6 million.
“I don’t read anything into it,” Steven Birenberg of Northlake Capital Management says of pay cuts among media CEOs. “Given the massive pay packages these guys receive, I don’t think losing some millions, even $10 million-plus, means anything. If there is any story, it remains how excessive the pay packages are every year for CEOs, with media CEOs among the most excessive … given the '99 percent,' '1 percent' and '47 percent' stories of the past year, I think a lot of people would agree with me.”