CEO pay for Top 20 CEOs will increase by as much as 40%, and overall CEO compensation by 20% in 2021 according to new study by global search firm Christian and Timbers. CEO pay jumped 14.1% in 2020 (NYT/Equilar).
“Compensation for highest paid CEOs in 2020 heavily weighted by IPO valuation and will increase by up to 40% in 2021,” says Jeff Christian, CEO, Christian and Timbers. “There is a direct correlation between number and size of Mega IPOs, number of CEOs making over $100 million and highest compensation for the top 20.”
The Christian & Timbers study shows over 90% of top 20 highest paid CEOs in 2021 will be from recent IPOs in the tech sectors SaaS, Cyber, AI, Data, Marketplaces, Internet, E-commerce, EV, and Cloud. The highest paid CEOs in 2020 excluding Elon Musk, who made $6.6B (Bloomberg), were all CEOs whose companies went public that year.
Data collected indicates 250 IPOs priced in first half of 2021, with only 218 for all of 2020. (Renaissance Capital: excluding SPACs, closed-end funds, direct listings and companies with market caps below $50M).
Christian predicts, “The number is sure to increase to a total close to 300, with mega IPOs planned for Stripe, Rivian Automotive, and Robinhood.”
15 company leaders received awards worth 100 million or more in 2020 compared to 1 in all of 2019 (according to Bloomberg) Christian and Timbers study indicates at least a 40% increase in 2021 over 2020 to over 20 all contributing to the overall increase in CEO compensation.
The top 5 IPOs in 2020 totaled $269 billion versus the anticipated top five in 2021 of $383 billion, an increase of 42.3% according to numbers compiled by Christian & Timbers (data from Visual Capitalist on 2020 numbers, Forbes for 2021).
The top mega IPOs for 2020 were: Snowflake, $93B, Palantir, $50B and Door Dash, $49B, (Morningstar). “The top mega IPOs so far for 2021 include Coinbase, $86B, Didi, $72B, Coupang, $60B, with some of the biggest yet to come, including Stripe anticipated at $95B, Rivian Automotive at $70B,” states Jeff Christian.
The three primary contributing data indicators of the Christian and Timbers study are: 1. Increase in the number of IPOs, 2. Increase in valuation of IPOs, 3. Correlation between compensation and valuation at IPO.
With offices globally, Christian and Timbers has been the World’s Best Practice Disruptor and Innovator for over 40 years. The first firm with a VC Fund, successes include; CEO HP, F5 Networks, WebMD, Upwork and Apple’s first Woman Director.
Jeff Christian, author “The Headhunters Edge”, founder of Christian and Timbers has been named four years on the Forbes Midas List. Frequent guest on CNBC, Christian recognized leader in search, completed the first CEO search for HP, Steve Jobs’ last 2 board searches securing CEOs for F5 Networks, WebMD and Upwork. https://christianandtimbers.com/