Eight-figure annual compensation increasing among Triad corporate CEOs

A record 21 corporate and not-for-profit healthcare chief executives with ties to the Triad have surpassed the eight-figure threshold for total annual compensation.

The Journal's and News and Record's 14th annual executive compensation analysis measured 42 publicly traded corporations, which meant 50% received at least $10.3 million during fiscal 2025.

Publicly traded corporations are required by Congress to report in its annual shareholder proxy filing the base salary, bonus/incentive pay, stock and stock-option awards, deferred compensation (typically pensions) and perks of their five highest-paid executives.

For the 19 corporate chief executives who received at least $10 million in total compensation, most can continue to thank the years' ago decision by their boards of directors to tie their annual compensation primarily to company share-price performance.

Wells Fargo & Co. chief executive Charlie Scharf led the 2025 analysis with a stunning $94.52 million, of which $51.94 million came from stock awards and just under $30 million in stock option awards.

Stock- and stock-option awards are valued in the annual proxy filings on the day they are awarded by the company, but may not become receivable for one or more years.

Scharf's total compensation was more than doubled that of No. 2 on the list, JPMorgan Chase & Co.'s Jamie Dixon at $40.63 million.

Scharf took over as chief executive in October 2019 as the bank's fourth leader since September 2016 when a reputational-staining fraudulent customer account scandal erupted to the surface.

The bank explained that $60 million of Scharf's 2025 compensation is related to a special award for his leadership in resolving the final 13 of 15 federal regulatory consent orders related to its scandal.

The primary consent order was established in 2018 by the Federal Reserve that imposed a $1.95 trillion asset cap in 2018 in response to the bank's fraudulent checking account scandal that erupted in September 2016. For banks, loans are considered assets.

The $60 million has a six-year vesting period with vesting in three equal installments beginning after the fourth anniversary.

Exceeding $20 million

Besides Scharf and Dixon, the number of corporate chief executive grew from six to eight who received at least $20 million in total compensation during 2025.

The others are: Lincoln National Corp.'s Ellen Cooper ($27.99 million); Lumentum Holdings Inc.'s Michael Hurlston ($27.67 million); RTX Corp.'s Christopher Calio ($24.85 million); Skyworks Solutions Inc.'s Philip Bruce ($24.54 million); Caterpillar Inc.'s James Umpleby III ($222.19 million); and Lowe's Cos. Inc.'s Marvin Ellison ($21.58 million).

In terms of industry sectors of those 21 chief executives with more than $10 million in total compensation, seven are manufacturers - Lumentum, RTX, Skyworks, Gildan, Caterpillar, Nucor Corp., Kontoor Brands Inc., Qorvo Inc., and HanesBrands Inc.

HanesBrands was purchased by Gildan in December for $4.4 billion.

The rest are: five in banking (Wells Fargo, JPMorgan, Truist Financial Corp., Huntington Bancshares Inc. and First Horizon Corp.); food processing (Tyson Foods Inc.); retail (Lowe's), aviation (American Airlines Group Inc); insurance (Lincoln Financial Group); health care (Labcorp), shipping (FedEx Corp.) and trucking (Old Dominion Freight Line Inc.).

Rising tides perspective

Defenders of high levels of chief executive compensation typically rely on a rising-tide-lifts-all-boats aphorism.

They claim there's a limited pool of executives with the skill to run a publicly traded company, particular those that make billions of dollars in annual revenue.

Therefore, annual increases in total compensation, particularly through stock- and stock-option awards, are necessary to hire and keep top executives - particularly in highly competitive industries.

Stock- and stock-option awards serve to motivate executives to maximize revenue streams and profitability, thus compensating shareholders as well and providing stability to their workforce.

"With CEO compensation tied to performance, the CEO's interests align with the company's interests, assuring the board of directors that the CEO will always act in the company's best interest; what's good for the company becomes good for the CEO," according to corporate governance consultant Diligent.

"The more complex the CEO's responsibilities, the higher the compensation. Consider the size of the business, the diversity of operations and the influence of the CEO on key decisions.

"A CEO with a proven track record in leading similar companies can command a larger compensation package," according to Diligent. "This also includes unique skills or expertise the CEO brings that are hard to find."

Yet, the left-leaning Economic Policy Institute said in a September 2023 report that chief executives are paid massive compensation packages by corporate boards because of their bargaining power, not because of their skills.

"To illustrate just how distorted CEO pay increases have gotten, in 2021 CEOs made nearly eight times as much as the top 0.1% of wage earners in the U.S."

Another factor: corporate boards of directors typically set executive compensation based on their industry peers.

When a competitor increases CEO compensation, the board often feels compelled to match or surpass that compensation level for their CEO.

If stock awards and options are properly designed, the benefits received by the corporation in terms of revenue and share price performance will exceed the compensation offered to the executive, said Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University.

Share repurchases top factor

Companies have been allowed to repurchase their own shares since 1982.

A corporation typically buys back its stock from the marketplace to reduce the number of outstanding shares.

Because there are fewer outstanding shares, the remaining shares tend to become more valuable, driving up their price, and thus executive compensation tied to stock and stock-option awards.

The concern among some economists is that corporations are spending too much of their excess profits on share repurchases, rather than on capital investments and major hiring initiatives.

For example, the left-leaning Institute for Policy Studies focused its August 2024 report in part on Lowe's share-repurchase strategy.

"Lowe's spent $42.6 billion on buying back its own shares from fiscal 2019 to fiscal 2023 - a sum large enough to have given each of the firm's 285,000 global employees an annual $29,865 bonus for five years."

During that five-year period, Ellison's stock- and stock-option awards alone were valued at a combined $62.15 million.

Meanwhile, Lowe's spent $9 billion on capital investments, such as opening new stores, purchasing new equipment and acquiring real estate, over the same five-year period.

"Higher tax rates on companies with wide CEO-worker pay gaps would create an incentive to both rein in executive pay and raise worker wages, all the while generating significant new capital for vital public investments," the institute said.

The institute recommends a prohibition on chief executives from selling their personal stock for a multi-year period after a buyback, "preventing CEOs from timing share repurchases to cash in personally on a short-term price pop they themselves have artificially created."

Another recommendation was not allowing chief executives to sell their company shares within a year of a stock buyback announcement.

"While boards need to prepare for increases in total executive compensation to ensure their companies remain competitive in the market for top leadership talent, they should also be mindful of stakeholder perception and their companies' own long-term goals when designing compensation packages," according to an October 2024 report on corporate executive compensation from Harvard Law School's Forum on Corporate Governance.

The Harvard Law School researchers cited as a concern the elevation of stock awards in executive compensation packages, "potentially overemphasizing long-term equity growth at the expense of short-term corporate goals."

Researchers also said "it should be noted that guaranteed pay for CEOs - base salary - regularly makes up only 10% to 20% of total compensation; all else is at risk."

The left-leaning Economic Policy Institute said one strategy for reining in excessive CEO pay is requiring corporation to offer stock awards rather than stock options.

"With stock options, CEOs can only make gains: They realize a gain if their company's stock price rises beyond the price of the initial options granted, and they lose nothing if the stock price falls," according to the institute's September report on the subject.

"Having nothing to lose - but potentially a lot to gain - might lead options-holding CEOs to take excessive risks to bump up their company's stock price to an unsustainable short-term high as they are ready to exercise their options."

Meanwhile, the institute said stock awards "likely promote better long-term alignment of a CEO's goals with those of shareholders."

"A stock award has a value when granted or vested, and can increase or decrease in value as the firm's stock price changes.

"If stock awards have a lengthy vesting period of three to five years, then the CEO has an interest in lifting the firm's stock price over that period while being mindful to avoid any implosion in the stock price to maintain the value of what they have."

The institute said in its conclusion that "policies that limit CEOs' ability to dominate or collude with corporate boards to extract excessive compensation are needed to prevent the U.S. from becoming a winner-take-all society."

"These policies could include using tax policy to incentivize lower CEO pay, making shareholder votes on CEO compensation more binding, and using antitrust enforcement and regulation to rein in the market power of the largest firms

"Further, increasing typical workers' leverage to secure higher pay from firms would leave less left over for CEOs and other executives to claim - so raising typical workers' pay will provide a rein on CEO pay as well."

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