Live Nation, Netflix, Paramount Global & Warner Bros. Discovery CEOs Among Most Overpaid Last Year, Says Nonprofit As You Sow

Jill Goldsmith
·5 min read

Media, entertainment and tech companies held their own in the top 25 ranking of overpaid CEOs in 2022 by nonprofit As You Sow. Live Nation’s Michael Rapino ($139 million pay package) topped the list, which also included Netflix, Paramount Global and Warner Bros Discovery, as well as Charter, Apple and Alphabet.

Overall CEO pay has been front and center this year during a season of record labor unrest from writers and actors to auto workers. We won’t know 2023 pay for most companies until next spring.

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The shareholder advocacy group’s ranking of S&P 500 companies, its tenth, is particular as it starts with pay, data that’s been out for months, and calculates what it calls overpay by measuring compensation against three metrics: total shareholder return; the number of shares that are voted against a CEOs pay package at the annual meeting; and the ratio of CEO pay to median worker pay — a gap that has been steadily increasing and is being scrutinized by unions and policymakers.

As You Sow weights the first two data points at 40% each, and the pay ratio at 20% to develop its ranking. The numbers are for 2022 pay, the latest available. Pay packages for 2023 will start rolling out in April for companies on a calendar year.

CEO pay packages include salary and bonus as well as stock options and grants that vest over time and may be underwater. However, grants tend to be awarded year after year. Shareholder votes on pay are advisory only, meaning non-binding, but high ‘no’ votes don’t look good.

Using its metrics, the firm put Rapino’s amount of overpay at $123 million and noted that about 81% of institutional shares and 54% of reported shares voted against his 2022 package. The pay ratio – CEO compensation compared to average worker pay — was 5,414 to 1.

Live Nation noted in its proxy (an SEC filing with pay details of a company’s top five highest compensated execs) that a significant portion of its employees are part-time, seasonal and temporary with “relatively low total compensation.” And about $109 million of Rapino’s package was related to a five-year employment agreement renewal. Excluding that, and comparing his compensation only to U.S. full-time salaried employees, the pay ratio would have been 353 to 1, the company said.

“In a year marked by labor strikes that use vast pay disparities to measure how workers are undervalued, investors and companies alike can use this tool to hold executives to higher standards of individual and corporate performance moving forward,” said As You Sow of its report.

Netflix came in no. 7 with then co-CEOs Reed Hastings and Ted Sarandos taking in a combined $101 million, about $50 million each, and some $86 million of overpay, according to As You Sow. Over 70% of stockholders voted against executive comp and Netflix promised to make some changes to its pay policies this year. Greg Peters and Sarandos have been co-CEOs since January after Hastings stepped back.

Former Charter CEO Tom Rutledge (he stepped down from the role in December of 2022) came in at no. 10 with $39.2 million and a pay ratio of 707 to 1.

Paramount Global CEO Bob Bakish was no. 16 at $32 million, with a ratio of 291 to 1.

And Warner Bros. Discovery CEO David Zaslav moved down to no. 25 with a $39 million package, and a pay ratio of 227 to 1. He topped the previous list for 2021 with a package estimated at $246 million, inflated by a massive stock option grant. WBD has also tweaked its CEO pay formula. Zaslav, in a New York Times interview, said he didn’t mind overpaying writers.

High CEO pay and pay disparity were a rallying cry in recent labor disputes by Hollywood guilds, the UAW and others. Noting this, Sen. Sheldon Whitehouse (D-RI) and Reps Barbara Lee (D-CA) and Alexandria Ocasio-Cortez (D-NY) earlier this month introduced the Curtailing Executive Overcompensation (CEO) Act, which would apply an excise tax on companies that have at least a 50 to one CEO-to-median-worker pay disparity.  In 2022, the CEO Act would have raised over $10 billion from the top 100 US companies alone, the policymakers estimated.

“There’s no justification for a CEO making hundreds of times what the average worker at their company is earning. It’s a sign of illness in society and a drag on our economy. Congress has to step in and correct the wretched excess of CEO self-dealing,” said Whitehouse, announcing the bill.

The tax, which may have a tough road in D.C., would apply to companies with over $100 million in revenue and $10 million in payroll. The rate imposed would be proportional to the size of the executive’s compensation (including salary, bonuses, and stock awards and options) and the degree to which the pay ratio exceeds 50 to 1. The tax would be limited to one percent of a company’s gross receipts.

High CEO pay is hard to crack as companies and executives continue to look across their business at “peer groups” and what competitors are paying.

But, according to As You Sow, moderating CEO pay could be a good business proposition. Overall, it said, companies with the most overpaid CEOs have had lower returns to shareholders than the average S&P 500 company.

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