Women remain all but absent among the highest paid executives at public companies in Los Angeles, according to the Business Journal’s annual accounting.
Just two women appear on this year’s list of the 50 best-paid chief executives — the same number as last year — with zero holdovers.
The scarcity of women on the list is not new. The number of women among the top 50 best-compensated chief executives of public companies in L.A. has remained virtually static for the past decade. During that time, the highest number of women to appear on the list was three in 2015. The low was zero in 2010.
The two women appearing on this year’s list are Eileen Drake, chief executive of El Segundo-based Aerojet Rocketdyne Holdings Inc., whose compensation package totaled $5.5 million, and Therese Tucker, chief executive of Woodland Hills-based BlackLine Inc., whose compensation totaled $4.8 million. The pair were Nos. 45 and 47, respectively, on the 2019 Business Journal list.
The list is based on compensation data for 2018 that is pulled from proxy statements and annual reports filed with the Securities and Exchange Commission.
Drake and Tucker’s salaries were a fraction of the best-compensated chief executives on the list, which was topped by Walt Disney Co. Chief Executive Robert Iger, who pulled in $65.7 million in 2018.
Experts on women in leadership roles and executive compensation cite several reasons why few women rank among the highest-compensated chief executives of public companies in L.A., including lack of representation on boards where pay decisions are made.
“My best assessment is that when more women serve on corporate boards, there will be more equitable treatment of compensation for women,” said Betsy Berkhemer-Credaire, who runs the Los Angeles-based executive research firm Berkhemer Clayton Inc.
“Corporate boards are there to represent the interests of shareholders, and they are responsible for hiring and firing CEOs and managing overall compensation, for CEOs and senior executives. That’s one reason why CEOs are less than thrilled about women coming on board,” Berkhemer-Credaire said. “Logically, they might think their compensation may be at risk — on the male side. Women CEOs are very cognizant of equitable pay.”
Berkhemer-Credaire, who is also chief executive for the nonprofit organization behind the 2020 Women on Boards campaign, led an effort to get California lawmakers to pass the first law in the United States to require gender diversity on corporate boards — partly as a way to break male dominance among corporate directors and get better pay for women executives.
The legislation passed and was signed into law last year by former Gov. Jerry Brown. It stipulates that the percentage of women on boards for publicly traded companies headquartered in California be at least 20% by 2020. The California law increases again the requisite number of women directors beginning Jan. 1, 2022. At that time, a minimum of three women directors is required for boards of six or more, two women directors for boards of five, and one woman member if a board is made up four or fewer members.
Pay disparity remains
Despite the new law, closing the pay gap for women executives remains an uphill battle.
The overall compensation for women on the 2019 list fell, with Drake and Tucker earning 72.5% less than the $37.4 million earned by the two women on the Business Journal’s 2018 list of the 50 highest-compensated chief executives.
That’s partially due to incentives structures and buyouts of the two women chief executives on last year’s list, which included Margaret “Margo” Georgiadis, the former CEO of El Segundo-based toymaker Mattel Inc., who was appointed to that position in February 2017 but stepped down just over a year ago. Georgiadis had a $31.3 million compensation package in 2017.
The other woman on last year’s list, Julia Stewart of Glendale-based restaurant chain Dine Brands Global Inc., resigned in February 2017 after serving 15 years as chief executive. She had a compensation package of $6.1 million in 2017, the bulk of which was part of an exit package.
While the aggregate compensation year over year for women CEOs on the Business Journal’s list fell, 2018 individual compensation for Drake and Tucker rose compared to their respective pay in 2017. Tucker, who has led rocket and missile propulsion system-maker Aerojet Rocketdyne since June 2015, saw her pay package jump 55% in 2018 from the year prior. Tucker, who founded cloud-based software firm BlackLine in 2001, saw her 2018 compensation increase 744% from 2017.
Compensation crash
The total 2018 compensation of all chief executives at public companies in Los Angeles on the 2019 list fell by 53% to $658 million, down from $1.4 billion the year prior. The fall was largely due to a massive reduction in compensation for Snap Inc. Chief Executive Evan Spiegel, who took home $637.8 million in 2017 — easily putting him at No. 1 on the 2018 list. The compensation package came as part of a huge award he was given for taking the ephemeral photo app-maker public. Spiegel’s compensation dropped to just $800,847 in 2018, and he did not make it onto the Business Journal’s 2019 list.
While Spiegel’s absence dragged the total tally down, Disney’s Iger saw his 2018 compensation balloon 81%, more than enough to reclaim his position at the top of list.
The pay bump, however, earned the ire of some prominent Disney shareholders, including Abigail Disney — granddaughter and grandniece of the company’s co-founders, brothers Roy and Walt Disney. The Disney heir called Iger’s $65.6 million compensation package “insane” during comments during an April event. The commentary touched off a pointed discussion about corporate responsibility and the merits of raising taxes on the extremely wealthy.
Other top earners in 2018 included j2 Global Inc. Chief Executive Vivek Shah, who was No. 2 on the list with $45.1 million in total compensation; Kilroy Realty Corp. Chief Executive John Kilroy Jr., who was No. 3 with $43.6 million; Michael Arougheti, Ares Management Corp.’s chief executive, who was No. 4 with $34.2 million; and Activision Blizzard Inc. Chief Executive Bobby Kotick, who rounded out the top five with $30.8 million.
