Fiserv Had ‘Most Overpaid’ CEO
Jeffery Yabuki was 15th most overpaid CEO in 2020, study finds, making 428 times the average worker.
Fiserv Inc. has so much money it could pay its CEO Jeffery Yabuki $27.6 million in annual compensation, or $13.8 million more than he deserves, a new study concluded. The company has so much money it could shell out millions for naming rights to the Milwaukee Bucks arena. But it pays its employees so little that Yabuki made 428 times the average worker. Yabuki stepped down after 15 years as a top-paid CEO in May 2020 and was succeeded by Frank Bisignano.
Yabuki was included among the 100 most overpaid CEOs in the annual ranking done by As You Sow, which calls itself “the nation’s non-profit leader in shareholder advocacy.” The rankings are based on the most recent year of salaries. This is the seventh year the group has done its analysis, and Yabuki made the list in some of those other years as well. He was the local poster boy for how the nation’s wealth gap is elevating the 1% to ever richer heights at the expense of all other Americans.
“Yet, CEO pay continued to increase. The Wall Street Journal reported that ‘median pay reached $13.1 million for CEOs of the biggest U.S. companies, setting a new record for the fifth year in a row.’ A study by the Economic Policy Institute… found that CEO compensation surged 14 percent in 2019 to $21.3 million.”
As You Sow determines who are the most overpaid CEOs by a formula taking into account total shareholder return over the past five years, the percent of shareholders voting against the CEO pay package (30.88% voted against Yabuki’s compensation) and the ratio of CEO to average worker pay. The computation of the amount overpaid is calculated based on total shareholder return under that CEO’s leadership.
Ranking first, as the most overpaid CEO, was Sundar Pichai, the top dog at Alphabet Inc. (better known as Google) who earns $280.6 million, or $266.7 million more than he deserved. That was 1,085 times the average worker’s pay. The majority of shareholder votes — 69.15% — opposed the pay package.
Ranking second worst was David M. Zaslov, CEO of Discovery, Inc., who earned $45.8 million or $33.8 million more than he deserved and which was 578 times the average worker’s pay. The vast majority of shareholder votes — 85.55% — opposed the pay package.
In seven years of analyzing this data, As You Sow has made some interesting conclusions, including:
-Top paid CEOs do a power job, earning less for shareholders. “Between 2015 and 2020 the companies in the S&P 500 who were never on our list had an annualized total shareholder return… of 5.6 percent, significantly outshining (by a factor of two) the annualized return of just 1.95 percent of the nine companies who have repeatedly been our list of ‘The 100 Most Overpaid CEOs’.”
-Shareholder opposition to big CEO pay is growing. In the most recent year analyzed, “the number of S&P 500 companies where the CEO pay package failed to get at least 50 percent of the votes more than doubled, going from six companies to 15 companies.”
-Managers of mutual funds and pension funds are increasingly opposed to high CEO pay. “The number of financial fund managers who voted against the CEO pay package of at least half of the ‘100 Most Overpaid CEOs’ in their investment portfolios reached 47.”
Even as Yabuki earned 428 times more than his average worker, the Bucks owners got all the return from the public-private investment in the new arena. It’s our local version of America’s wealth gap.
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