Hot stock market spiked pay for metro Detroit CEOs

2020 was a challenging year as CEO.

But for top executives at Metro Detroit’s publicly traded companies, COVID-19 was also a financially rewarding year.

The total compensation of the 25 highest-paid executives on this year’s Crain list of highest-paid CEOs rose 30.8 percent from their 2019 salaries. The average salary package for this group rose from $ 9.6 million to $ 13.5 million.

Much of that surge was driven by a $ 28.9 million payment to Rocket Companies Inc. CEO Jay Farner to fund taxes on a stock award prior to the company’s initial public offering in August. That brought his salary package to more than $ 51 million.

But excluding his salary from the calculation, the average salary increase for the group is still 16 percent, with an average pay of $ 11.5 million.

Those increases far outpaced national numbers from compensation consultant Equilar and The Associated Press, which found S&P 500 companies an average increase of 5 percent to $ 12.7 million.

Farner was not included in the national study because Rocket is not a member of the S&P 500, but his salary would have made him the fifth highest paid executive in the country if Rocket had been included.

What is the driving force behind the surge in a year marked by COVID-19 troubles? A roaring stock market that increased the value of stocks and options that make up the bulk of the salaries of most CEOs, Equilar said. Bar bonuses went down.

“Because stock compensation affects CEO salaries, a hot market affects bigger awards,” wrote Equilar’s Dan Marcec. S&P 500 stocks posted a return of nearly 16 percent last year. Cash bonuses actually decreased on average, reflecting the business challenges posed by COVID, Equilar noted.

The figures shown here were compiled for Crain’s by S&P Global Market Intelligence from company disclosures with the Securities and Exchange Commission.

A look at the top five highest paid CEOs and the year of their companies in 2020:

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