CEO Pay High In 2022 Amid Industry Shakeup, Writers Strike
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The deadline for public companies working on calendar fiscal year to disclose their top executives’ pay made for unfortunate optics. It fell on April 28, only three days before the current WGA contract with the studios is set to expire — and the parade of eight-figure packages for top executives at some of the same media companies from which writers are seeking minimum pay increases has raised eyebrows.
Amid a media-industry reset over the past year, studios have been pointing to the rough times they’ve been going through while countering WGA’s pay-increase proposals, including tanking stocks, layoffs and other cost-cutting measures, inflation and recession fears.
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Despite all that, many entertainment CEOs got hefty raises in 2022, with the stream of announcements coming as the WGA-AMPTP negotiations entered their final weeks.
CEO compensation last year averaged about $32 million for 13 CEOs at 12 media companies (Netflix has co-CEOs), with several executives crossing the $50 million mark. Packages featured a mix of cash and equity awards. “But all of them will look astounding to shareholders in the context of salaries elsewhere,” said Rosanna Weaver, a pay expert at nonprofit shareholder advocacy group As You Sow.
See list of CEOs and their pay below.
The revelations did not sit well with writers, actors and crafts people who started sharing an image in support of a potential WGA strike. While it features the 2021 pay for some top media CEOs, the reaction to 2022 executive compensation has been similar, especially given the timing of the announcement as studios have been looking to bridge the gap on minimum pay for rank-and-file writers in the contract negotiations.
As sometimes happens, a non-CEO takes the lead with Roku’s new head of media since late October, Charlie Collier, among the highest-paid executives. The former chief of Fox Entertainment got a $53 million package last year when he jumped to the platform where he worked for the last three months of 2022. Roku CEO Anthony Wood’s package, meanwhile, was $20.9 million. Roku recently announced plans to lay off 200 employees, or 6% of its workforce, as part of a restructuring, after letting go 200 last fall as it looks to slow “year-over-year operating expense growth and prioritize projects that…have a higher return on investment.”
Among chief executives, Netflix co-CEOs last year, Reed Hastings and Ted Sarandos, topped the list, with about $50 million each, up 25% and 32%, respectively. Hastings segued to executive chairman early this year with Sarandos and Greg Peters now co-CEOs. Netflix has famously allowed executives to choose how they want to be paid, in cash or stock. Sarandos has tended to take cash, and saw a $20 million base salary. (Hastings took almost all of his pay last year in stock options as he usually does.)
Netflix was the first to wave a big red flag that ushered in a year of industry upheaval. In April 2022, the streamer reported its first subscriber loss in over a decade, setting off alarm bells that saw the Wall Street outlook on streaming pivot from enthusiasm to angst, and a subsequent fallout across media stocks. Netflix shares ended last year down 50% . The streamer let hundreds go after that, calling the layoffs “adjustments so that our costs are growing in line with our slower revenue growth.”
Nudged by shareholders, the company said it has reexamined its pay policies starting this year.
Nexstar CEO Perry Sook is no. 3, with pay rising 86% to $39 million. The stock was one of very fewer gainers in the media space last year although there has been a squeeze with jobs lost at the CW, which Sook has promised to turn profitable by 2025.
Paramount Global’s CEO Bob Bakish saw a 60% pay increase to $32 million. The stock fell 45% last year. The company has been thinning out its executive ranks and restructuring, including folding Showtime into Paramount+.
Comp in 2021 was skewed by Warner Bros. Discovery CEO David Zaslav and Endeavor chief Ari Emanuel. Zaslav was granted option awards worth $202 million when his contract was extended, and as the Warner Media-Discovery merger was set to close. His pay fell to $39 million last year. WBD promised Wall Street $4 billion in savings and has been laying off staff across its portfolio from television and Max to CNN and ad sales.
For 2021, Emanuel received a restricted stock grant valued at $293 million related to the company’s IPO. His pay was $19 million for 2022.
In both cases, the 2021 equity awards were tied to performance.
Pay is usually disclosed in company proxy statements which were due last Friday for companies operating on a calendar year and had been trickling out for weeks before. Those with fiscal years ending in September, like Disney, or in June, like Fox, filed earlier.
In discussing pay, compensation committees of the board often notes a few things, including the need to stay competitive in the marketplace given packages awarded to CEOs in the peer group (which creates a hard-to-break cycle). In times of turmoil, like Covid, and now, they stress an executive’s ability to steer the ship, set strategy and make hard decisions in a difficult enviroment. They also stress that equity grants often vest over years and can be tied to stock performance or other metrics, so the “fair value” in the compensation tables isn’t the same as cash in hand.
Proxies include the compensation of a company’s top five highest paid executives. The list of names for 2022 mirrors in a sense seismic shifts in the media business, and in the corner office.
Bob Chapek was CEO of Disney for the company’s entire FY 2022. His pay dipped to $24 million from $32 million the year before. Chapek, who was abruptly replaced by Bob Iger last November, exited with a cash-and stock-package valued at about $20 million.
Disney’s fiscal year runs from Oct. 1 to September 30.
Iger, who had been executive chairman until retiring from Disney in December of 2021, earned $15 million for FY 2022. His new package as CEO is worth about $27 million for each year of his two-year term. Disney has taken heat from shareholders in the past on Iger’s pay. He had a $46-million package in FY 2021. The company is in the process of cutting $5 billion in costs and laying off 7,000 staffers.
AMC Networks paid three former CEOs, Christina Spade, Matt Blank and Josh Sapan, a total of $40 million last year. Spade, the most recent, left AMC in November after three months in the role. Chairman of the board of the majority family-owned company, James Dolan, took over temporarily amid major layoffs and cost cutting. Kristin Dolan, his wife, was named CEO in February.
Jeff Shell, ex-CEO of NBC Universal, still had his name on the Comcast proxy filed last week but forfeited much of the $21 million package listed there and more (to the tune if $43 million, including unvested stock units, and vested and unvested stock options) after being fired for cause.
Comcast chief Brian Roberts pay package dipped 6% to $32 million. NBCUniversal has seen scattered layoffs in select divisions as belt-tightening outlined in 2022 starts to take effect. Paramount Global has been thinning out its executive ranks and restructuring, including folding Showtime into Paramount+.
Fox Corp. CEO Lachlan Murdoch earned $21.7 million. Fox chairman Rupert Murdoch was paid $18.4 million. The company just settled a lawsuit against Dominion Voting Systems for nearly $800 million.
At the White House Correspondents Dinner this weekend, comedian Roy J. Wood, hit a serious note about newsrooms being gutted. Companies are “cutting people, cutting budgets. But you never hear about the multimillion-dollar executives reducing their salaries at these organizations.
“It’s a time when it reflects poorly on the industry, when so many are losing their jobs, yet there always seem to be enough money for high executive pay,” said Weaver. “These are forward facing companies. They have reputational risk.”
Netflix said that starting in 2023 it will cap co-CEO base salary at $3 million and require that 50% of allocatable pay be in stock options — although only with a one-year vesting period, not particularly long term. WBD has tied some of CEO Zaslav’s compensation to free cash flow.
AMC Entertainment chairman Adam Aron, who earned $23.7 million in 2022, asked the board to freeze his 2023 pay. He made the declaration in February, before 2022 pay was reported on Friday. “I do not want “more” when our shareholders are hurting,” he tweeted then.
Straying into tech, Apple said that after engaging with stockholders, it is reducing CEO Tim Cook’s total compensation from $99 million last fiscal year to $49 million in FY 2023.
CEO PAY FOR 2022
Reed Hastings – Co-CEO
2022: $51.1 million
2021: $40.8 million
Up 25%
Ted Sarandos – Co-CEO
2022: $50.3 million
2021: $38.2 million
Up 32%
Perry Sook – Nexstar
2022: $39.3 million
2021: $21.1 million
Up 86%
David Zaslav – Warner Bros. Discovery
2022: $39.3
2021: $246.6
Down 84%
Tom Rutledge – Charter, executive chairman, stepped down as CEO on Dec. 1
2022: $39.2
2021: $41.9 million
Down 6.3%
Brian Roberts — Comcast
2022: $32.1 million
2021: $33.9 million
Down 5.6%
Bob Bakish – Paramount Global
2022: $32 million
2021: $20 million
Up 60%
Bob Chapek – Walt Disney Company
FY 2022: $24.2 million
FY 2021: $32.5 million
Down 25%
Adam Aron – AMC Entertainment
2022: $23.7 million
2021: $18.9 million
Up 25%
Gregory Maffei – Liberty Media
2022: $22.4 million
2021: $21.6 million
Up 4%
Lachlan Murdoch – Fox Corp.
FY 2022: $21.7 million
FY 2021: $27.7 million
Down 21%
Anthony Wood – Roku
2022: $20.9 million
2021: $18.1 million
Up 16%
Ari Emanuel – Endeavor
2022: $19 million
2021: $300 million
Down 94%
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