This CEO Made 2,077 Times What His Workers Did

It is not unusual for chief executive officers to make many times the median pay of their employees. However, some of these ratios are huge. Last year, one chief executive made 2,077 times what his workers did, a much larger ratio than any other public company, by far.

Aptiv PLC (NYSE: APTV) is not a well-known company. It designs and makes vehicle parts and claims it is helping “green” the car sector. The COVID-19 pandemic has put the company at risk for hard times this year as auto sales have plummeted. However, in 2019 its stock rose 54%, compared to an increase of 29% by the S&P 500. Shares have been hammered this year, down 41% in the past month.

Kevin P. Clark has been Aptiv’s CEO since March 2015. Financially, the company had a mediocre year in 2019. Revenue was $14.4 billion, about flat with 2018. Net income dropped from $1.07 billion to $990 million.

Clark made $15,164,533 last year. Of that, $1.4 million was base salary. Stock awards were $11.5 million. Clark made $14.1 billion in 2018 and $13.8 billion in 2017. Across those three years, he made $43 million. The figures mean that Clark’s compensation compared to his workers has been very high each year.

Companies that the compensation committee of the board used to set Clark’s compensation included Cummins, Eaton, Textron and Lear. The company also has generous savings, retirement and severance plans for senior management.

According to the company’s 2019 proxy, the median employee’s total annual compensation was $7,032. Aptiv had 141,000 employees at the end of last year.

The debate about high CEO pay goes back for decades. Employees, shareholders and politicians have all weighed in. Many say a CEO cannot possibly be worth 1,000 times what the company’s workers are paid. That is, perhaps, unless a company posted extraordinary results.

Part of the battle about CEO pay has led to the attempt by shareholders of many companies to have a “say for pay.” Under the system, shareholders could have a direct effect on compensation. The efforts have failed in almost every instance.

Clark is an example of how wildly high CEO compensation has become. That puts him in the center of an ongoing debate.

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