Historical Stock Chart
6 Months : From Apr 2019 to Oct 2019
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 group.
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 risk.
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 company-paid aircraft.
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 company.
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 company performance.
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 Services.
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 $13 million.
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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