As part of the U.S. Securities and Exchange Commission’s new pay versus performance disclosure rules, public companies were required for the first time to determine “compensation actually paid” to executives.
As reported by the Wall Street Journal, the numbers show that in 2022 about two-thirds of the top executives at S&P 500 companies ended the year with smaller pay packages than they were initially awarded, at least on paper. Some 140 CEOs earned more money than expected, and at 46 companies, the CEOs ended with at least double what boards planned to pay them for the year, according to the Journal’s analysis.
Historically, companies have reported executive compensation as it was valued when executives received it, which fluctuates based on the company’s stock price. The SEC’s rule is designed to move disclosure beyond the moment-in-time snapshots that investors have considered for years.
For example, the Journal’s analysis found that the stock awards Elon Musk got for running Tesla lost nearly $10 billion in value last year. Stock declines also erased $237 million in compensation for Expedia’s CEO Peter Kern and roughly $149 million for Amazon CEO Andy Jassy.
Conversely, a pay package initially valued at about $7 million for Regeneron Pharmaceuticals CEO Leonard Schleifer was worth nearly $100 million at the end of the year. And T-Mobile CEO Michael Sievert, whose compensation was originally worth $29 million in stock, tripled by the end of 2022.
Tesla has reported $0 as total compensation for Musk since at least 2020. The $9.7 billion loss in value comes from a 2018 performance award distributed over a 10-year period. The drop in value for Kern comes from 2021 equity awards worth about $295 million that will continue vesting until at least 2026. Jassy received 2021 equity awards of $212 million that will continue to vest until 2031.
Overall, the median pay package for S&P 500 CEOs declined to $14.5 million in 2022, down from a record $14.7 million the previous year, with median cash compensation of $3.7 million. The decline marks the first time in a decade that compensation for top executives at the biggest U.S. companies didn’t reach new highs.
Performance also declined in 2022, with about two-thirds of companies recording negative shareholder returns, with a median negative 9.2%. Even at the 137 companies that had positive results, performance declined to a median 16.6% return, compared with an overall median of 30% in 2021.
U.S. Employees Are No Longer Willing to Relocate for Jobs
As reported by Bloomberg News, the share of job seekers who relocated to take up a new position fell to 1.6%, the lowest level on record, in the first quarter of 2023, according to a quarterly survey that’s been carried out by executive coaching firm Challenger, Gray & Christmas, Inc. for decades.
Behind the shift in attitudes lies a post-pandemic surge in remote and hybrid positions, which has made it possible for more workers to stay where they’re living even as they change jobs. What’s more, Bloomberg notes, higher interest rates have made buying a house somewhere else more expensive — especially when it also requires people to sell an existing home that’s financed with a mortgage locked in at low costs.
The new data piles on top of longer-term trends that have seen U.S. workers grow steadily more reluctant to relocate — perhaps because diminishing job security has made the costs of moving house seem like less of a safe investment.
“In the 1980s and 90s, nearly a third of job seekers would move for new positions,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. “Now, remote and hybrid positions are keeping workers at home.”
About one-third of U.S. companies said most of their workers are in the office, according to Challenger — up from just 13% last fall. Fewer than half of workers went to the office in 10 of the largest U.S. business districts in the week ended May 10, according to data from Kastle Systems, a office key-fob firm.
The Challenger data comes from a survey of over 3,000 job seekers across the country.
Workers Testing Positive for Marijuana Reaches 25-Year High
According to a report by the Wall Street Journal, a record number of workers tested positive for marijuana in 2022.
Overall drug use among workers tested by employers generally held steady last year, according to an annual tally from , one of the country’s largest drug-testing laboratories. In drug tests given to workers after accidents on the job, marijuana positives rose sharply last year, hitting the highest level in a quarter-century.
Of the more than 6 million general workforce tests that Quest screened for marijuana in 2022, 4.3% came back positive, up from 3.9% the prior year. That is the largest marijuana positivity rate since 1997. However, positivity rates last year for certain classes of opioids and barbiturates declined.
While marijuana was the main driver of the rise in positive drug tests, more tests also came back positive for amphetamines. Positive tests for amphetamines rose to 1.5% in 2022, up from 1.3% in 2021, according to Quest, which doesn’t differentiate between prescribed medications and illicit drug use.
More than two-thirds of U.S. states have legalized recreational or medicinal use of marijuana. That push has some employers questioning whether to keep testing for the drug, as they weigh safety risks and legal liabilities.
Employers should be careful about punishing workers based on a positive marijuana test, Scott Pollins, an employee-rights lawyer in Philadelphia, told the Journal.
The percentage of employees that tested positive for marijuana following an on-the-job accident rose to 7.3% in 2022, an increase of 9% compared with the prior year. From 2012 to 2022, post-accident marijuana positive test rates tripled, tracking with widening legalization.
UPMC Faces Antitrust Complaint from a Coalition of Unions
The New York Times reported that a coalition of labor groups on Thursday filed an antitrust complaint with the Justice Department against UPMC, the giant Pittsburgh-based hospital employer, accusing the system of using its enormous clout to depress wages and harm workers.
In its complaint, the group, which includes S.E.I.U. Healthcare Pennsylvania, claims UPMC workers are subject to a “wage penalty” because of the health system’s dominance in local markets. The complaint describes nurses who are given heavier workloads than nurses at other hospitals, creating concerns over patient safety, and catalogs what the coalition considers to be labor law violations that it says illustrate the powerlessness of employees to improve working conditions.
“We have watched UPMC grow and amass power,” said Matthew Yarnell, the president of the S.E.I.U. group there, which has long sought to organize workers at the health system, which is largely not unionized. After a series of acquisitions, it is Pennsylvania’s largest private employer with more than 40 hospitals, 800 doctors’ offices and clinics, and a health plan. With operating revenue of $26 billion last year, it employs about 95,000 people, the Times reported.
While antitrust cases frequently address how powerful organizations can operate as monopolies and unfairly raise prices, a company can also be accused of operating as a monopsony in which it exerts unfair leverage over suppliers, including employees.
In the complaint, the unions claim that UPMC’s monopsony power has also prevented workers “from exiting or improving these working conditions through a draconian system of mobility restrictions and widespread labor law violations that lock in sub-competitive pay and working conditions.”
The system “is among the best places to work in all the regions we served,” Paul Wood, UPMC’s chief communications officer, said in an email to the Times. He said the system’s average wage was more than $78,000 annually.
“There are no other employers of size and scope in the regions UPMC serves that provide good paying jobs at every level and an average wage of this magnitude,” he added.
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