Last year, payments to top executives in Los Angeles were on the rise, led by leaders in the financial, real estate and technology sectors.
In the list of business journals starting on the next page, 84% of CEOs received salary increases between 2020 and 2021. Non-Chief Executive Officers also did not pay fares, with 74% reporting a surge in compensation over the same period. ..
Ian Larkin, a strategic associate professor at the Anderson School of Business at the University of California, Los Angeles, said executive compensation could increase given the fact that large companies have emerged from the early economic consequences of the Covid-19 pandemic. Said it was expensive.
“Now, many companies are getting out of the pandemic and are actually making a lot of money. In many industries, they say: She’s a big salary increase,” Larkin said. ..
finance
One of the CEOs who experienced a significant increase in remuneration was Michael Aloheti, CEO of Ares Management Aloheti, Century City-based Global Alternative Investment Manager. A whopping 870% increase over the previous year.
Arougheti’s colleagues, who occupy the three spots on the part-time list, didn’t get all the experience. Ares co-founders David Kaplan and Bennett Rosenthal both cut salaries by 59%, and Chief Financial Officer Michael McFerrand experienced a 150% increase.
Ares generated $ 559 million in revenue in the first quarter of 2022, more than 7% below expectations. However, the company’s share price has risen about 49% in the last two years.
Another financial industry team on the list included an executive at B. Riley Financial Inc., based in Sawtelle.
The latest earnings report of a financial services company strongly juxtaposed the profits of compensation made by its executives. B. Riley’s co-CEOs Thomas Kelleher and Bryant Riley have announced an increase in compensation of just over $ 20 million (about 436%) in total, despite the company’s low earnings.
In the latest report, B. Riley says he was hit in every way, from net profit and operating profit to net profit and revenue. Specifically, net income was approximately minus $ 10 million, down more than 70% year-on-year.
Larkin said the increase in executive compensation was strongly influenced by the stock market. Stock-based compensation can cover a significant portion of an officer’s salary. For example, more than half of Riley’s total salary came from stock rewards.
“CEO compensation tends to be very closely tied to the stock market, and the stock market has been incredibly strong until the last few months,” Larkin said. “When companies report the performance of CEOs and other executives, they implicitly use their current stock prices. [show] The value of these options for restricted stock. “
real estate
Real estate has a strong presence on both lists, represented by executives from companies such as KB Home, Alexandria Real Estate Equities Inc., Kilroy Realty Group and Rexford Industrial Realty Inc.
The highest ranked executive in the industry was Alexandria Executive Chairman and Founder Joel Marcus. Marcus was ninth on the non-Chief Executive Officer list and paid $ 12.7 million.
In a 2022 real estate trend report from PricewaterhouseCoopers, a network of companies said real estate returned to revenge after overcoming a pandemic-induced pause in mid-2020.
“Domestic and international investment capital is skyrocketing in US real estate. Several factors are driving this demand, including low interest rates and attractive returns on risk,” he said.
Most of the real estate executives on the list have experienced salary increases.
High-tech companies compete
Larkin said one of the reasons companies tend to see an increase in the same sector is that companies use compensation consultants to determine payroll packages.
“These consultants benchmark packages against competitors’ packages,” Larkin said. “Therefore, if a CEO raises his salary significantly, his fellow CEOs in the industry often get something similar very quickly. This is because companies try to pay near the top of the industry. This can lead to a spiral of executive compensation, especially in technology, media and banks. “
Leading the list of technical executives was Snapchat’s parent company, Snap Inc. Santa Monica companies had 5 entries across the list, most of them.
Former Chief Strategy Officer of Snapchat, Jared Grusd, was number one on the part-time list with a total compensation of $ 26.9 million. Grusd is currently Chief Strategy Officer of Chime, a San Francisco-based fintech company. Grusd and the other four Snapchat executives on the list have experienced or made no changes to their compensation. Jerry Hunter, Senior Vice President of Engineering, has made the biggest reduction among Snapchat executives. His salary was down 61% to $ 10.1 million.
Snap Inc. shares continued last year as they traded for about $ 74 in October 2021 and are now trading at about $ 14 per share. Prior to Snap’s second-quarter earnings report, company executives warned that external economic factors could cause the company to miss the lower end of its earnings forecast.
Wage declines can be outliers in the tech industry, as Larkin said there has been a consistent increase in executive compensation in industries such as technology and digital media.
Health care
The highest healthcare entry on the list was by Christopher Anzalone, CEO and President of Arrowhead Pharmaceuticals Inc.
Ansalone is one of the top four healthcare executives on the CEO list, followed by Amgen’s Robert Bradway, Molina Healthcare’s Joseph’s Bretsky, and Puma Biotechnology’s Alan Auerbach. ..
All CEOs received an increase in compensation, but Auerbach took the lead by a significant margin, recording a 318% increase in compensation.
“Some clear beneficiaries, especially healthcare companies, were agile and made some good strategic decisions about how to deal with Covid,” said Larkin, who said Pfizer had the opportunity in a pandemic. Said that it was the company that found or created.
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