How Much Did the COVID Pandemic Really Affect Executive Pay?

Posted: March 23, 2021

The COVID-19 pandemic hit Americans incredibly hard and forced many people out of the workplace and into their homes in order to quarantine. Some reports show that as many as 30 million people lost their jobs due to the pandemic while people labeled as “essential workers” were forced to risk their health in order to keep working. To help show their concern to employees, many executives voluntarily took pay cuts, and every executive compensation consultant in America has had to tailor their strategy accordingly. However, how much of a sacrifice were they really making? This article will take a look at how much the COVID-19 pandemic really affected executive pay. Stock gains The pandemic created one of the most interesting stock markets that we’ve seen in years. This is because some companies, like American Airlines or Carnival Cruise, saw their entire business essentially shut down in a matter of days. Other businesses, like Zoom or Amazon, found that their businesses just became significantly more valuable due to new quarantine rules. Through no fault of their own, many CEOs and executives saw their net worth skyrocket during a time when many Americans were praying for a $2,000 stimulus check from the Federal Government. In total, billionaires made about $3.9 trillion during the pandemic. In particular, Elon Musk (Tesla) and Jeff Bezos (Amazon) saw their net worth grow astronomically as they swapped places back and forth for the title of World’s Richest Man. What about their total salary? The companies hit hardest by the pandemic were ones that rely entirely on people traveling or vacationing (Delta, Disney, Marriott, Carnival etc.). These companies were forced to make massive layoffs and, to help minimize the effects, a few CEOs decided to opt-out of their full salaries. However, most data shows that even executives who did make this sacrifice decided to only cut 10 percent or less of their total 2019 compensation. For example, if the CEO was paid $10 million in 2019, they most likely still made over $9 million in 2020 during the pandemic. In the airline industry: 1. Oscar Munoz, United Airlines executive chairman, took a pay cut of $610,000 which was less than 3% of the $22.2 million he earned in 2019. 2. J. Scott Kirby, United’s chief executive, gave up $790,000 of his salary which was about 9% of the $8.7 million that he earned in 2019. 3. Ed Bastian, Delta’s chief executive gave up $714,000 of his salary which is about 5% of what he received in 2019. What about bonuses? Since executives earn money in a number of different ways, we can not forget about bonuses that were awarded in 2020. One stark example of a company who still thought executive bonuses were necessary while they were laying off 6,000 employees was Uber. Although these bonuses were smaller than in 2019, Uber determined that the executives showed “unwavering leadership during the crisis”. This leadership earned executives a cash bonus of 78% of what they had already planned for. Due to this, Chief Executive Dara Khosrowshahi earned a bonus of $1.56 million, instead of her expected $2 million. $1.56 million is enough to pay an employee for another 215,000 hours of work (at the federal minimum wage). To learn more about maximizing executive compensation, visit our Contact Page, or contact us directly by email at or by phone at 415-618-6060.