- There’s a stark disconnect between corporate financial performance and compensation for chief executives among a broad sample of 50 publicly traded companies with revenues over $1 billion, a new analysis shared with Fortune revealed. Year over year, median revenue growth collapsed from 3.7% to 1.6% and earnings per share growth dropped from 0.3 to basically zero among the 50 companies. In contrast, companies that granted significant boosts to bonus payouts saw a 280% increase on average and at companies where payouts were lower, bonuses were only down 45%, a new study from Compensation Advisory Partners shows.
Tyson Foods CEO Donnie King got a relatively paltry $436,000 bonus in 2023 but his payout roared to nearly $6 million in 2024 after the chicken-and-beef purveyor hit a key financial goal in its pay plan. In addition to the larger payout, the Tyson board took significant steps to keep King from jumping ship at the Fortune 500 company.
Tyson extended King’s contract to 2027 and gave him $10 million in additional equity awards —$5 million in restricted stock units and $5 million in performance stock. The board also bumped his base salary from $1.4 million to $1.7 million. To sweeten the deal, he also got a post-employment perk that includes 75 hours of personal use of the company jet as long as he sticks around on the board and Tyson promised to set up a retiree health reimbursement arrangement for him. This was all done to keep him at Tyson; the board explicitly told investors the rationale was to “incentivize CEO retention.” King’s total pay in 2024 was $22.7 million compared to $13 million the year prior.
Meanwhile, Tyson’s five-year total shareholder return (TSR), which measures the overall value generated for shareholders, was 80.54%. That means if you invested $100 in Tyson Foods stock at the end of fiscal 2019, the investment would have been worth $80.54 at the end of fiscal 2024. From 2023 to 2024, the one-year TSR figure went from $80.54 to $65.73, remaining well below the S&P 500 Index, which grew from $154.68 to $210 over the same period. The S&P 500 Consumer Staples Index—which Tyson uses as a basis for comparison—grew from $148.13 to $188.77.
On the other hand, Tyson Foods’ adjusted operating income, which means operating income after taking into account unusual one-time gains or losses, was the metric the company hit that triggered King’s relatively larger bonus payout. The figure was $1.8 billion for fiscal 2024, well above a max target of $1.4 billion. Tyson was profitable in 2024 after posting a loss in 2023 and earnings per share reached $8.92 compared to negative $1.87 the year prior. Tyson referred Fortune to its proxy statement in response to a request for comment.
While Tyson’s King is an extreme example, for the past two years, running financial performance regarding revenues and earnings per share have been largely divorced from CEO pay, according to a new analysis from Compensation Advisory Partners (CAP) published Wednesday. CAP reviewed pay levels at 50 companies with fiscal years ending between August and October 2024 with revenues ranging from $1.5 billion to $391 billion. (The most recent proxies reveal payouts from the previous year.) The majority of S&P 500 companies file proxy statements in the spring and the first 50 cohort are referred to as the early filers.
Pay at the top shoots higher for some CEOs
At the median, total pay for the 50 CEOs grew by 9%, and that includes salary, annual cash bonuses, and long-term equity compensation, the latter of which typically makes up the bulk of chief executives’ pay. The big increase came from bonuses, which were up 14%, CAP found. And cash was king—base salary plus bonuses increased by 9.8%, while grant-date values of long-term equity incentives rose more than 7%.
“A lot of the companies that had the most significant growth are rebounding from 2023, so it was more of an increase to reflect better performance year-over-year,” said Lauren Peek, a partner at CAP and coauthor of the new analysis. Companies that saw a bonus rebound in 2024 compared to 2023 saw a 280% increase on average, and at companies where bonus payouts were lower year over year, the decline was about 45% on average, CAP found.
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For the most part, shareholders get it, and Peek said that’s why companies “take great pains” in offering clear rationales in their proxy statements to explain any changes that are made.
Plus, board-level compensation committees, which make the final call on payouts for CEOs and the goals they need to hit to earn them, want to incentivize executives for outcomes they can directly influence. Therefore, “adjusted measures” that exclude negative economic factors are often used to calculate yearly bonuses.
“Ideally, the idea of a bonus plan is to reward management for things in their control,” said Joanna Czyzewski, a CAP principal and coauthor of the report. “Certainly, there are macroeconomic issues like tariffs and supply chain and interest rates playing into reported financials and that’s why we’ll see results like this at times given the use of adjusted measures in incentive plans.”
Accordingly, financial performance was flat on average among the early 50 filers for the second year in a row, CAP found. Median revenue was up 1.6%, earnings before interest and taxes (Ebit) grew modestly at 3.9%, while earnings per share flatlined at 0%. The one bright spot was in median TSR, which was up 15.2% year-over-year. TSR was the only metric that showed strong positive growth, CAP found.
Meanwhile, the S&P 500 blew the lights out in 2024, with a staggering total return of 23% mainly accomplished on the backs of the Magnificent Seven which includes Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, which were up 67%.
Bonuses rebound, bonuses fall
Other CEOs saw bonuses bounce back due to hitting other goals and performance measures set by board-level compensation committees.
At Disney, CEO Robert Iger’s bonus rebounded from $2.1 million in 2023 to $7.2 million in 2024, bringing the value of his total pay to $41 million in 2024 compared to $31.5 million the year prior. The board cited the successes of Inside Out 2, which brought in a global box office of $1.7 billion and was the highest-grossing animated film in history, and Deadpool & Wolverine bringing in $1.3 billion. It was the highest-grossing R-rated film ever, Disney said. Iger also hit milestones in streaming, including the launch of Hulu on Disney+. Disney was also one of Fortune’s “World’s Most Admired Companies.”
Adjusted revenues increased 3% to $91.4 billion while adjusted total segment operating income grew 21%, and after-tax free cash flow grew 253%. Disney’s TSR in dollars was $78.96, while its peer group TSR was $179.61, according to the company’s pay-versus-performance table.
At Qualcomm, CEO Cristiano Amon’s bonus grew from $540,000 in 2023 to $3.7 million in 2024. Qualcomm’s TSR was $162 compared to peer group TSR of $185, per its pay-versus-performance table.
At Apple, CEO Tim Cook’s bonus grew from $10.7 million to $12 million, while its TSR was $207.59 over a peer group TSR of $198.69, according to Apple’s performance table.
Meanwhile, at Deere & Co., chairman and CEO John May’s bonus was basically flat at $5.9 million compared to $6 million, Hormel Foods chairman and CEO James P. Snee’s annual incentive grew slightly from $1.3 million to $1.8 million, and Sally Beauty CEO Denise Paulonis’s bonus was up from about $1.4 million to $1.5 million.
Other CEOs saw bonus values fall. For instance, Jack in the Box‘s former CEO Darin Harris got $786,000 in 2024 compared to $1.6 million in 2023. Harris’ resignation was announced last month.
At Walgreens Boots Alliance, which recently announced plans to go private, CEO Tim Wentworth didn’t get a bonus last year.