LOS ANGELES (AP) — Once again, media company CEOs are among the highest paid executives in the nation, occupying six of the top 10 earning spots according to an Associated Press/Equilar study.
Compensation experts say a variety of factors are at play, including the gain in media stocks, the intangible value of talent in a hit-or-miss business, the control of shareholder power in very few hands, and the decline of the financial sector.
Outsized stock growth boosts the value of stock and option grants. Media companies' shares have rebounded strongly since the 2008 recession, mainly because advertising spending grows in tandem with a growing economy. That means higher-priced ads and higher-priced execs.
Stocks of the six media companies on the list all outperformed the Standard & Poor's 500 index, which grew 128 percent in the five years through December 2013, according to FactSet.
CBS Corp. shares grew a whopping 699 percent in that period; Discovery Communications Inc. went up 539 percent; Viacom Inc. rose 377 percent; The Walt Disney Co. rose 250 percent; Time Warner Inc. climbed 259 percent and Comcast Corp. grew 223 percent.
"If shareholders are happy they don't care how much a person makes," said Paul Dorf, managing director of consulting firm Compensation Resources Inc. "When they complain most is when the market doesn't do well and their stock is going down the tubes."
Making it big in media means generating hits. And while top executives may not be hands-on with every decision, they are where the buck stops.
Take Disney's animated blockbuster "Frozen," which grossed $1.2 billion at box offices worldwide. While Disney CEO Bob Iger didn't make the movie, he did orchestrate Disney's $7.4 billion acquisition of Pixar in 2006, which brought in talented executives to help reform Disney's faltering animation studio.