NEW YORK - Even as millions of people in the US have lost their jobs during the coronavirus pandemic, the soaring stock market since the spring has delivered outsize gains to the wealthiest Americans. And few among the super-rich have done as well as corporate executives who received stock awards this year.
The pay gains are a result of the sharp rise in the stock prices of these companies, which investors are betting are well-positioned to grow during the pandemic. Another reason these stock awards have appreciated so much is that some of the grants were made when the stock market was close to its lowest point for the year. Of course, many executives are also sitting on gains on stock they got in earlier years.
"The stock market is not an indicator of the health of the economy for working people; it's an indicator of economic inequality," said Brandon Rees, deputy director of corporations and capital markets at the AFL-CIO."These CEO payments reflect that reality." Then, everything started to move in Mr Stack's favor. Investors, believing that Dick's could profit in the pandemic economy and encouraged by stimulus from Congress and the Fed, bid up the price of the company's stock. But because Mr Stack had far more shares in the 2020 stock grants than he did in 2019, the overall value of the awards has ballooned. The 2020 awards were worth about US$7 million when they were issued and are now valued at a combined US$67.4 million.
"If you don't adjust your approach when there is a shake-up in the market and your stock price is down significantly, investors are going to raise concerns," said Brett Miller, head of data solutions for the responsible-investment arm of ISS."What you don't do is give executives more opportunities to increase their value."