While Millions Lost Jobs, Some Executives Made Millions in Company Stock – The New York Times

If we had a dollar for every time we pointed out that stock and option grants to CEOs and other top executives should be indexed to the peer group, then we’d probably have $60 million, too. This is not rocket science. These gains have nothing to do with the individual performance of these companies or these executives.

Even as millions of people have lost their jobs during the pandemic, the soaring stock market since the spring has delivered outsize gains to the wealthiest Americans. And few among the superrich have done as well as corporate executives who received stock awards this year. Executives With the Biggest Gains Corporate leaders whose stock options or grants this year have appreciated the most.

Edward W. Stack, the chief executive of Dick’s Sporting Goods, and William Lynch, president of Peloton, for example, are each sitting on paper gains of over $60 million on stock-based awards they mostly received in the first three months of the year, based on Wednesday’s closing stock prices, according to an analysis by Institutional Shareholder Services, which advises investors on how to vote on corporate matters. And Stéphane Bancel, the chief executive of Moderna, a drug maker developing a coronavirus vaccine, received options in February that have appreciated by nearly $30 million. The pay gains are a result of the sharp rise in the stock prices of these companies, which investors are betting are well positioned to grow during the pandemic. Another reason these stock awards have appreciated so much is that some of the grants were made when the stock market was close to its lowest point for the year. Of course, many executives are also sitting on gains on stock they got in earlier years. But the surge in wealth also highlights how the compensation of senior executives is designed to give them enormous windfalls, which they have gotten even during one of the sharpest economic downturns in decades. These gains are also a reminder that income and wealth in the U.S. economy are tilted heavily toward a tiny number of top earners who own significant amounts of stock.

While Millions Lost Jobs, Some Executives Made Millions in Company Stock – The New York Times

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