It pays to be on top: Pittsburgh’s Fortunate 50 rake in more than half a billion dollars

By Anya Litvak / Pittsburgh Post-Gazette

If the run-up to a corporate deal is a hectic and draining time for the executives in charge, the landing is surely soothed by the payout. Top executives often see a large bump in compensation the year of, or after, a major company transition.

Viatris, the Canonsburg-based generic drugmaker formed out of the merger of Mylan and Pfizer’s Upjohn business in 2020, has been paying the transition tab for years.

Its executive chairman emeritus, Robert Coury, earned $41.5 million in compensation last year, including a $21 million severance payment for leaving the company.

Its former president, Rajiv Malik, earned $12.5 million.

Former CEO Michael Goettler, who led the firm since 2020 and was replaced by Scott Smith in February 2023, earned $9.8 million for the year, including $8 million in severance.

Parting (a public company) is such sweet sorrow.

In its public filings, Viatris told investors that it no longer has “any significant outstanding legacy arrangements” and that its executive compensation strategy going forward will be “simplified and performance-based.”

Whether that will shift Viatris (and its predecessor Mylan) as a mainstay at the top of Pittsburgh’s Fortunate 50 list remains to be seen.

Mr. Coury topped this year’s list of the highest paid executives at Pittsburgh-based public companies, whose median annual compensation was around $8.7 million in 2023.

Between them, these individuals earned more than half a billion dollars last year, or about 75% of the city of Pittsburgh’s operating budget this year.

Their haul represents an increase of 18% over the Fortunate 50 in 2022.

Executive compensation, which public companies are required to report for their top named executives, is a mix of base salary, bonuses, benefits and stock awards. The total compensation listed in company filings is the current value of these awards.

The companies with the most executives on the The Post-Gazette’s Fortunate 50 list this year were Viatris and PNC, both with five, followed by Ansys and Kraft-Heinz with four. 

Only three women are among the best-paid squad in the region.

Executive earnings have been trending up for years, with a blip during the first year of the COVID-19 pandemic.

According to data analyzed for The Associated Press by the California-based executive intelligence firm Equilar, CEOs of S&P 500 companies saw their median pay increase by 13% last year.

Compensation for the rest of the private sector workforce was up 4% during the same time.

Public companies are required to calculate the ratio between their CEO’s compensation and the earnings of their median employee, which the firm selects using its own criteria. Among Pittsburgh-based firms, the ratio last year ranged from a low of 3:1 at Duolingo to a high of 1,929:1 at American Eagle Outfitters.

To be fair, it’s not an apples to apples comparison. 

American Eagle’s CEO Jay Schottenstein did earn a hefty $16.8 million last year, placing him fourth among the Fortunate 50. But the median employee at American Eagle is a part-time retail worker at one of the company’s stores in the U.S., who earned $8,707 last year.

In the case of Duolingo, where the median employee earned $266,639 last year, according to company filings, the ratio was further narrowed by its CEO’s $766,500 compensation package, a relatively modest value — especially compared to the $74 million Duolingo’s CEO and founder Luis von Ahn earned in 2021, following the company’s initial public offering.

For over a decade, companies also have been required to solicit non-binding approval from their shareholders on executive compensation packages. Investors tend to overwhelmingly vote yes on such say-on-pay proposals, although there have been notable instances of dissent — Viatris shareholders, for example, disapproved of its executive compensation proposal in 2021 by a margin of 4 to 1, and nearly 70% of Consol Energy Corp.’s shareholders rejected its 2022 compensation proposal.

Since the votes are non-binding, they typically result in changes to the compensation structure in future years.

According to proxy advisory firm Glass Lewis, shareholder disapproval over executive pay has mellowed since the pandemic, even as compensation awards have not.