By Charlie McGee
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 27, 2019).
Media titans came under heavy scrutiny in 2018 for their
business practices and deal making, but they were well-compensated
for their trouble.
The S&P 500's communication-services sector, a group that
includes Facebook Inc., Walt Disney Co. and AT&T Inc., posted a
median CEO pay of $22.6 million in 2018, according to a Wall Street
Journal analysis, higher than any other sector and more than $10
million above the median pay of S&P chief executives as a
The sector included two of the five highest-paid CEOs in the
Journal's analysis of the index. David Zaslav of Discovery Inc.,
one of the sector's smallest companies, had a $129.4 million pay
package, more than any other CEO, as the owner of television
networks such as Discovery Channel, HGTV and Food Network posted a
total shareholder return of 10.6% for the year. A spokesman for
Discovery said Mr. Zaslav's compensation is mostly made up of
performance-based equity over the next five years and is 97% at
The median raise for the media CEOs who were in their roles the
entire year was 4.4%. Three of them more than doubled their pay,
while one got a substantial pay cut.
Companies in the sector posted a median total shareholder return
of 3.9%, compared with the negative 5.8% median return for the full
index. Still, most companies did either significantly better or
worse than that figure: Five posted returns of at least 19.7%, and
six posted returns of negative 12.8% or worse.
Facebook's total shareholder return was among the sector's worst
at minus 25.7%. The company faced public and regulatory criticism
for its collection and use of personal data, questions about its
role in fostering misinformation during elections, and the prospect
of antitrust scrutiny.
Meanwhile, Facebook more than doubled the pay it reported for
founder and chief Mark Zuckerberg, who collected $22.6 million in
compensation. Mr. Zuckerberg's pay was made up almost entirely of
nearly $20 million in company-paid personal security for him and
his family, along with $2.6 million for personal use of a
The median employee at Facebook was paid $228,651 last year.
Facebook declined to comment.
AT&T paid Randall Stephenson $29.1 million, while its 2018
shareholder return was negative 22%.
Mr. Stephenson, head of the telecommunications giant for more
than a decade, benefited from the company's victory over U.S.
antitrust enforcers last year. A federal judge ruled that
AT&T's deal to buy Time Warner Inc. for more than $80 billion
could go through without AT&T needing to divest itself of
assets as the Justice Department had demanded. The Journal reported
at the time that Mr. Stephenson was unlikely to survive as
AT&T's CEO if his merger strategy had been blocked, according
to people familiar with the matter.
An AT&T spokeswoman said 93% of Mr. Stephenson's
compensation was tied to performance incentives such as stock price
to align his interests with those of AT&T's shareholders,
adding that his compensation also reflects the responsibilities of
running one of the world's largest companies.
Disney's Robert Iger received $65.6 million, second-most in the
sector and third-most overall. Disney posted a shareholder return
of 20.4%, driven in part by blockbuster film releases such as
"Avengers: Infinity War" and "Black Panther," two of the
highest-grossing films of all time. Reed Hastings of Netflix Inc.
was the third-highest-paid communication-services CEO, making $36.1
million, while the streaming service posted a shareholder return of
39.4%, second-best in the sector.
Mr. Iger's reported compensation didn't include some stock
awards tied to completing Disney's acquisition of 21st Century Fox
entertainment assets -- a deal that had shareholder approval but
still faced regulatory hurdles at the year's close.
Including those awards in Mr. Iger's pay total could have added
as much as $114 million to his pay at the time, Disney said in a
footnote in its proxy. Early this year, however, the company said
it had canceled $13.5 million in potential salary and incentive
awards for Mr. Iger linked to the Disney-Fox deal.
Disney closed its Fox acquisition in March for $71.3 billion. A
Disney spokeswoman said the performance-based portion of Mr. Iger's
stock award will only reach its target value if Disney delivers
strong performance through 2021, and that his results-driven
compensation reflects the exceptional value he has created for the
Google parent Alphabet Inc., the sector's largest company, paid
CEO Larry Page just $1, while Twitter Inc. paid CEO Jack Dorsey
$1.40 -- a nod to Twitter's original 140-character limit for user
posts on its social-media service.
Mr. Page owned nearly 20 million shares in Alphabet as of April
22, and Mr. Dorsey owned about 16 million shares in Twitter as of
late March. The companies declined to comment.
Stephen Kaufer of online travel company TripAdvisor Inc., the
sector's smallest company by market capitalization at year's end,
received $2 million last year after a stock-heavy $47.9 million pay
package in 2017 -- leaving him with the biggest drop in pay among
incumbent S&P 500 CEOs. The company has said it awards equity
grants about every four years in an effort to promote long-term
The Journal analyzed CEO compensation and company performance
data reported by S&P 500 companies through May 1, using pay
data provided by MyLogIQ LLC and performance measures from ISS
Analytics, a unit of proxy adviser Institutional Shareholder
The analysis omitted companies if their most recent proxy filing
covered fiscal years ended before July 1, 2018, because they
largely reflect an earlier time period. That includes Fox Corp. and
Wall Street Journal parent News Corp, which share common ownership.
For the year ended June 30, 2018, Rupert Murdoch received total
compensation valued at $49.2 million as CEO of 21st Century Fox,
while News Corp CEO Robert Thomson received pay valued at nearly
The Journal's analysis also excluded companies with CEOs who
joined or left midyear. That included former CBS Corp. head Leslie
Moonves, who was slated to receive $47 million but forfeited nearly
$34.5 million of it after resigning amid allegations of sexual
assault and harassment, which he has denied; CenturyLink Inc.'s
Jeffrey Storey, who made $35.7 million after he took over for the
telecom company's longtime CEO, who resigned in May last year; and
Verizon Communications Inc.'s Hans Vestberg, who made $22.2 million
after also taking over for a resigned predecessor in August. The
companies declined to comment.
--Theo Francis contributed to this article.
(END) Dow Jones Newswires
June 27, 2019 02:47 ET (06:47 GMT)
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