Media CEO Pay 2023: Guess Who Didn’t Get the Memo?

Media CEO Pay 2023: Guess Who
Cheyne Gateley for Variety

For Hollywood, 2023 was an annus horribilis. But you wouldn’t have guessed that by looking at the pay stubs of many bigwigs in the biz.

Last year, first writers and then actors went on strike, demanding better contracts after seeing their earnings threatened by the streaming economy. As picket lines swelled, film and television production ground to a standstill, leaving studios with fewer movies and shows to release. As for streaming, once seen as the salvation for a business struggling to attract a fractured (and distracted) audience — well, that has its own set of problems. Nearly every media company has launched an in-house Netflix challenger, but things went south after Wall Street grew concerned that these streaming services cost too much and made too little. That sent share prices sliding across the sector, leading to layoffs and pledges to economize.

However, the spirit of cost-cutting wasn’t widely embraced when it came to paying the executives who run these companies. The majority of the 12 top execs whose compensation packages we survey here got pay increases in 2023. (Note that stock awards and options represent fair value as of the grant date and do not reflect actual dollar amounts received by executives.) It should be noted that of the two tech titans we look at, Amazon’s Andy Jassy got a 4.5% bump, while Apple’s Tim Cook saw his compensation fall 36%. To be sure, Amazon and Apple make much more money selling, say, paper towels and iPhones than releasing movies, leaving them relatively unscathed by the strikes. Still, experts say the outsize pay packages for media executives are galling given the challenges the industry faces.

“It looks terrible to your employees and it hurts morale,” says Charles Elson of the University of Delaware’s John L. Weinberg Center for Corporate Governance.

Executive compensation also became a cudgel for Hollywood unions. Striking writers and actors brandished signs detailing the enormous paydays for media pashas like Disney’s Bob Iger and Warner Bros. Discovery’s David Zaslav. The message was clear: Why should we settle for less when you keep getting more and more?

“A lot of smart people were laid off with a lot of time on their hands, and it’s not hard to find that data,” says Rosanna Landis Weaver of shareholder advocacy group As You Sow. “When you’re having daily conversations about how much these workers are worth, more attention will be paid to how CEOs are valued.”

And there are lots of creative ways that media chiefs justify their rewards. Compensation committees give top brass financial targets to hit, but other qualitative considerations are less empirical. In determining Iger’s bonus, the board cited Disney’s inclusion in Newsweek’s “Most Trustworthy Public Companies” list, while Zaslav’s bonus was partly justified by his hiring of a new HR head.

It’s hard to see how those rank as significant accomplishments for captains of sprawling media conglomerates. But many of these companies, such as Comcast and Fox, have dual-class stock, which means the families that control them get to make the rules when paying their leaders without facing much shareholder pushback. Those that don’t have that kind of ownership, such as Disney, pay their leaders handsomely because they use their rivals as a peer group: They lavish bonuses and options on their executives because, hey, everyone else is doing it.

There are signs that these high-flying paydays may be subject to a gravitational pull. After shareholders rejected Netflix’s executive pay plan (in an advisory vote), the streaming giant announced that it was changing the way it compensated leaders. Going forward, most executive compensation will be pegged to operational and stock performance metrics. Elsewhere, a judge revoked Elon Musk’s $56 billion package as Tesla CEO, saying it had been determined by a board that was in the tech mogul’s pocket.

“The Musk situation could make other companies more careful because they don’t want to invite judicial scrutiny,” notes Elson.

From Variety US