Of the 50 highest paid chief executives in Los Angeles last year, 20 went home with lighter wallets than the year before, according to the Business Journal’s annual compensation list.
The impact was felt across a range of industries.
Executives at commercial real estate operators, for instance, were hurt by empty offices, deserted shopping malls and food courts and lost foot traffic at retail outlets.
Hollywood execs, meanwhile, suffered from a pause in production work and locked doors at movie theaters.
On the other hand, some C-suite types saw gains as a result of Covid-19.
Streaming services, gaming companies and ecommerce businesses all seemed to register positive results as consumers stayed home and turned to their screens to watch, play and shop.
Amit Batish, director of content with Equilar Inc., a Redwood City-based compensation data firm, said compensation in L.A. reflected broader trends.
Batish added that CEO pay at the nation’s 100 largest publicly traded companies fell less than 2% in 2020 — though the declines were mostly in base salaries rather than long-term packages filled with bonuses, stock options and other performance incentives.
“The incentive side of compensation largely stayed intact because they had to keep the CEOs in their posts,” Batish said.
Total compensation packages rose to $672.6 million in 2020, up from $562 million in 2019, according to the Business Journal.
Much of that gain was largely due to one CEO.
Activision Blizzard Inc.’s Robert Kotick, whose Santa Monica-based video game empire enjoyed a record year, saw his compensation package rise to $154.6 million, a 413% bump over his 2019 payout.
Another CEO who benefited from shifting consumer habits during the pandemic was Robert Greenberg at Skechers USA Inc. Housebound consumers opted for casual lifestyle clothes and performance footwear in the past year, and the Manhattan Beach-based company was able to answer the call.
Greenberg ranked No. 4 on the Business Journal’s list, with $20.3 million in total compensation, up 48% from $13.7 million the year before.
“I thought there would be a resetting of (CEO) performance goals,” said Murphy, who noted that corporate boards typically establish annual goals for bonus plans and metric hurdles for performance plans in late February.
“As it turned out, large companies did very well,” he added. “Commercial real estate got hammered, and restaurants and hospitality industries got into trouble, but we found out that a lot of businesses were pretty resilient to the shutdown. When you cut base salaries, you make it up somewhere else. They issued more stock grants, which are performance-based,” he added.
The second-highest paid CEO in L.A. last year was Todd Stevens, head of Santa Clarita-based California Resources Corp. One of the state’s largest oil producers, the company slipped into bankruptcy last summer when it failed to reach a debt-restructuring agreement with creditors.
Stevens oversaw the company’s exit from bankruptcy in October and a few months later announced that he would leave California Resources at the end of 2020. He took a total compensation package of $21.5 million with him — more than double the $10.5 million he received the year before.
Stevens isn’t the only CEO on the Business Journal list who has departed his position.
Michael Burke left his post as chairman and chief executive at downtown-based
AECOM in June 2020. He finished No. 7 on the list with total compensation of $17.4 million last year, a 10% bump from the $15.9 million he earned in 2019.
The exec who replaced Burke last June, longtime AECOM Chief Financial Officer Troy Rudd, landed at No. 24 on the list with $9.3 million in total compensation. That’s a 128% gain from 2019 when Rudd’s pay totaled $4.01 million.
Robert Iger, who abruptly stepped down as CEO of Burbank-based Walt Disney Co. in February 2020 and announced plans to leave his executive chairman role this year, came in No. 3 on the list.
His total compensation of just over $21 million marked a 56% decline from the $47.5 million he received the previous year. While the Disney Plus streaming service, which Iger guided, has been a success, the company lost billions of dollars during the pandemic because of closures at its theme parks and the shutdown of movie theaters.
Also gone is Adam Miller, founder of Cornerstone OnDemand Inc., who was replaced as CEO on June 15, 2020, by Phil Saunders, the former CEO of Saba Software.
Miller ranked No. 43 on the list with $5.3 million in total compensation, down 32% from his package of $7.8 million the previous year. Saunders, a newcomer to the list, holds the No. 34 spot with his $7.7 million in total compensation.
Another new name on the list is Dan Henry, who became president and CEO of Green Dot Corp. in March 2020. Henry’s time on the list may be limited, though. In May, the executive announced that the Pasadena-based prepaid debit card issuer is moving its headquarters to Austin, Texas, where he lives.
Henry ranked No. 11 on the list with a total compensation package of $15.8 million.
Women CEOs in short supply
Women CEOs in short supply
“There’s already not a critical mass of women, and all of sudden in one year, there is none. That’s really disturbing,” said Fernando Guerra, professor of political science and founding director of the Center for the Study of Los Angeles at Loyola Marymount University in Westchester.
In December, aerospace giant Lockheed Martin Corp. acquired Aerojet Rocketdyne Holdings Inc. for $5 billion in cash. The move means Aerojet President and CEO Eileen Drake will no longer head the El Segundo-based aerospace company when the deal closes in the second half of this year.
Drake came in at No. 21 on this year’s list with a total compensation of $9.6 million, up 32% from $7.3 million the previous year.
Therese Tucker, CEO, executive chairman and founder of Woodland Hills-based BlackLine Inc., an enterprise software company, stepped down as CEO on Jan. 1, handing the top spot over to Chief Operating Officer Marc Huffman.
Tucker was No. 27 on the list with $8.4 million in total compensation, down 63% from her package of $23 million in 2019.
Malls, industrial and commercial real estate businesses and other real estate-related categories were hit hard during the pandemic due to workplace restrictions. Still, some CEO pay held up.
Rexford Industrial Realty Inc. stood out. The company operates in fast-growing industrial and warehouse markets throughout Southern California, including the red-hot Inland Empire, showed few signs of slowing.
Howard Schwimmer and Michael Frankel, Rexford’s co-CEOs, had identical compensation packages of $8.3 million in 2020, landing them in the No. 29 spot on the list. The salaries of Schwimmer and Frankel each grew 39% in 2020.
Another outlier was Thomas O’Hern, CEO of Santa Monica-based mall owner and operator Macerich Co. O’Hern landed at No. 28. His 2020 compensation of $8.4 million marked a 21% jump in total compensation from $6.9 million the previous year.
O’Hern’s boost in compensation at Macerich, a real estate investment trust that stands as the third-largest owner and operator of shopping centers in the United States, came amid retail and restaurant closures in malls.
Feeling the impact
Feeling the impact
“California felt the pandemic pretty hard, and it took a lot of hits on commercial real estate, which is why many of these executives took a pay hit,” Equilar’s Batish said.
Executives who suffered big declines in total compensation included Co-CEOs Stephen Richardson and Peter Moglia of Pasadena-based Alexandria Real Estate Equities Inc.; John Kilroy Jr., president and CEO of Kilroy Realty Corp.; and Jordan Kaplan, president and CEO of Santa Monica-based Douglas Emmett Inc.
Richardson and Moglia saw their total compensation slip to $8.09 million and $8.04 million, respectively, or about 2.6% and 2.7% less than 2019’s. The co-CEOs lease office buildings and laboratories to life science and technology industries in a sector that saw clinical trials slowed by the pandemic. They landed at Nos. 32 and 33 on the list.
Kilroy was No. 19 on the list with a compensation package of $11.9 million, down 1.5% from 2019.
Kaplan was No. 26 with pay of $8.5 million, down 10.2% from $9.4 million the year before. Douglas Emmett owns multiple office and apartment buildings in California and Honolulu.