Coca-Cola Company chief executive James Quincey made less money last year than some CEOs of smaller Georgia-based companies. But among more than 30 large Georgia public corporations, Quincey had the highest ratio of CEO pay compared to median employee pay: 1,016 to 1. BOB ANDRES /BANDRES@AJC.COM

AJC EXCLUSIVE: Georgia’s biggest CEOs get $1 million raise, on average

Georgia’s highest paid CEO doesn’t work at a high-profile corporation like Coca-Cola Co. or Home Depot. He leads a farm equipment business.

And the state’s second highest paid chief executive officer? He’s a newcomer compensated $20 million in 2018 after less than a year on the job.

It’s that time of year when corporate disclosures unveil the latest details about how much money titans of U.S. business made last year. They also offer a look into what people much farther down the ladder got paid.

Median employee compensation tops $138,400 at Intercontinental Exchange, the Atlanta-based company that owns the New York Stock Exchange. At Coca-Cola, it’s just $16,440, weighed down by lower paid bottling jobs in Africa.

Both are far below the big bosses’ one-year raises.

Chief executives of Georgia’s 10 largest public companies averaged about $1 million more in 2018 than a year earlier, according to an Atlanta Journal-Constitution analysis. As a group they averaged about $13.1 million each in total compensation, which includes salary and add-ons such as bonuses, stock and option awards, and gains in the value of pensions.

A $10 million “New Hire Award”

Still, some of the biggest payouts went to leaders of somewhat smaller publicly traded companies.

Martin Richenhagen’s $20.6 million compensation made him the highest paid Georgia CEO among the nation’s 1,000 largest public companies.

For 15 years, he’s led Duluth-based AGCO, which generated more than $9.3 billion in 2018 making tractors, combines and other equipment under brand names such as Massey Ferguson.

Martin Richenhagen, the CEO and chairman of Georgia-based AGCO, had $20.6 million in pay last year, the highest of any CEO of a large public company based in the state for 2018.
Photo: The Atlanta Journal-Constitution

Richenhagen, who is in his sixties, hadn’t talked about retiring, according to members of the company’s compensation committee. But they wanted to encourage him to stay, in part, so he could cut costs and boost profit margins. So they gave him nearly $8 million that will pay out over time. That rocketed Richenhagen to the top.

The change apparently didn’t sit well with AGCO shareholders. Two-thirds voted “no” on an advisory say-on-pay measure, an item that is typically a cake walk at most companies.

Richenhagen’s pay was only several hundred thousand dollars higher than that of Mark Begor, the new Equifax CEO. The credit reporting company reeled in the wake of a massive data breach, and Begor was brought in to help lead Equifax forward.

Over nine months, he made $20 million in compensation. Nearly three fourths was in stock awards, including a $10 million “one-time New Hire Award” to compensate him for pay he gave up at his prior employer.

Both Begor and Richenhagen got more than CEOs at bigger companies, such as James Quincey at Coca-Cola ($16.7 million), David Abney at UPS ($15.1 million), Craig Menear at Home Depot ($11.4 million).

Still, the compensation for Begor and Richenhagen was far lower than what CEOs of two other Georgia companies racked up a year earlier. In 2017, First Data’s Frank Bisignano ($102.2 million) and FleetCor Technologies’ Ronald Clarke ($52.6 million) were both ranked among the 10 highest compensated CEOs in the country. Pay for each fell nearly 90 percent last year, with Clarke’s dropping after years of shareholder complaints.

Shareholders have gotten a boost, too

Broad stockholder revolts over CEO pay are relatively rare.

Partly that’s because investors saw gains during a decade of stock market growth, said Peter Kimball, who heads advisory and client services for ISS Corporate Solutions.

Corporate directors keep tabs on pay at peer companies and “walk the fine line between retaining talented people and satisfying shareholder interests in keeping CEO compensation reasonable,” Kimball said. “Directors see increases in CEO pay as often times just keeping up with the Joneses.”

Salaries usually make up a small piece of compensation. Much more is tied to financial and stock performance. So annual CEO compensation figures often aren’t a guaranteed payout.

A rising stock market helps, said Joe Mallin, an Atlanta-based partner in Pay Governance, an executive compensation consulting firm. “CEOs tend to get rewarded in up cycles.”

And when the stock markets fall, CEO pay generally does, too, he said.

One Georgia CEO’s pay equivalent to 1,016 workers

Public companies are required to provide ratios showing how CEO pay compares to median employee pay. A ratio of 160 to 1 is the median at the largest companies, Kimball said. For smaller public companies, it’s 42 to 1. At Coca-Cola, it’s 1,016 to one.

A lot can influence the figures, including the type of industry, the number of part-time employees or the number of workers in other nations.

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