6/5/25 – Issue 10.22 – Your weekly news on all things board. 

CEO pay is soaring — and, unsurprisingly, so is the scrutiny. As executive compensation climbs ever higher, so does the attention from investors, boards, and the public eye. Compensation for S&P 500 chiefs jumped nearly 10% this year, with performance-tied stock awards driving many of the largest packages. Yet as executive pay reaches new heights, investor tolerance may be leveling off. Warner Bros. Discovery shareholders issued a symbolic rejection of David Zaslav’s $52 million package, and Tesla’s board is facing a thorny dilemma: how do you compensate the world’s richest man when the courts have thrown out his last deal? Meanwhile, the abrupt exit of UnitedHealth’s CEO and a rise in interim appointments are reigniting concerns over succession planning—raising questions about how well boards are balancing near-term incentives with long-term leadership readiness. In today’s environment, where stakeholder expectations are rapidly evolving and AI governance is rising on board agendas, directors are under pressure to align pay, performance, and planning with a sharper sense of purpose.

In the Spotlight

CEO Pay Rises Nearly 10%

CEOs had to navigate sticky inflation and relatively high interest rates last year, as well as declining consumer confidence. But the economy also provided some tail winds

“The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 10% in 2024 as the stock market enjoyed another banner year and corporate profits rose sharply. Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can’t cash in for years, if at all, unless the company meets certain targets, typically a higher stock price or market value or improved operating profits. The median pay package for CEOs rose to $17.1 million, up 9.7%. Meanwhile, the median employee at companies in the survey earned $85,419, reflecting a 1.7% increase year over year.” AP

The Highest-Paid CEOs

A windfall of stock grants has catapulted Rick Smith past perennial compensation heavyweights like Apple’s Tim Cook and Blackstone’s Stephen Schwarzman, seizing the top spot in The Wall Street Journal's annual highest-paid CEO list

“Rick Smith, who co-founded and runs the maker of Taser stun guns, tops this year’s list of the highest-paid chief executives, with pay of $165 million. The Axon Enterprise CEO’s pay outstripped that of the leaders of much larger companies, including General Electric’s Larry Culp, Blackstone’s Steve Schwarzman and Apple’s Tim Cook. Smith was the only S&P 500 CEO to receive a pay package above $100 million in 2024. Overall, CEO pay set another record. Half the chief executives in The Wall Street Journal’s annual analysis made $17.1 million or more last year, up from $15.8 million for the same executives a year earlier… JPMorgan boss Jamie Dimon came in at No. 23 with $37.7 million, while No. 63 Mark Zuckerberg got $27 million from Meta last year, mostly for security services. Tesla’s Elon Musk, whose last pay package has become a legal battle, came in last at $0.” WALL STREET JOURNAL

Shareholders to Zaslav: Not So Fast on That $52 Million Paycheck 

Warner Bros. Discovery investors voted against CEO David Zaslav’s hefty pay package, amplifying growing shareholder unease over executive compensation amid turbulent industry performance

“The majority of Warner Bros. Discovery shareholders who voted at the company’s 2025 annual meeting evidently believe CEO David Zaslav and other top execs are earning too much. At WBD’s annual stockholders meeting held June 2, investors voted down a non-binding ‘advisory’ measure to approve the 2024 compensation packages of Zaslav and the company’s other named executive officers…. Zaslav had a 2023 pay package worth $49.7 million, up 26.5% from the year prior. His compensation totaled $39.3 million in 2022, after he received an astonishing $246.6 million (which included $203 million in stock option grants) in 2021.” VARIETY

Tesla’s $50 Billion Question: How to Pay Elon Musk—Again  

Tesla must decide how to pay Elon Musk, who has demanded a bigger stake and whose last package has been thrown out

“Elon Musk was the lowest-paid chief executive of an S&P 500 company last year. Tesla paid him $0. It has been that way for several years amid a legal battle over a monster stock award in 2018…. Now Tesla’s business is struggling, Musk is fresh off his detour through U.S. politics, and the Tesla board is exploring a new compensation package for its longtime leader. It must answer a thorny question: How do you pay the world’s richest man? Pay for founder-CEOs varies widely….” WALL STREET JOURNAL

From Boardspan this Week:

From the Shareholder’s Seat: How Boards Earn and Keep Investor Trust 
 Wednesday, June 11, 2025 
 2pm ET

Join our upcoming webinar with BlackRock co-founder Barbara Novick. Barbara Novick has played a pivotal role in shaping the modern approach to investor stewardship and board engagement. She is a co-founder of BlackRock, the world’s largest investment management firm, was Vice Chair until 2021, and now serves as Senior Advisor. In this timely conversation with Abby Adlerman, CEO of Boardspan, Barbara will share her perspective on how boards can build stronger relationships with their shareholder base—whether institutional, long- or short-term, or retail—and navigate the growing complexity of the governance landscape. 

Across the Board

Inside the Spectacular Downfall of UnitedHealth and Its CEO

Andrew Witty, who largely led the U.S. healthcare giant from the U.K., made big bets on Medicare enrollees that backfired

“On Feb. 5, top executives of UnitedHealth Group gathered in a conference center on the company’s suburban Minneapolis campus. Chief Executive Officer Andrew Witty stood up in the front and offered an encouraging message: Business was good. He was optimistic about the company’s prospects in the coming year…. On April 17, Witty announced disappointing profits and cut UnitedHealth’s earnings projection for the rest of 2025. Weeks later, the company withdrew its financial guidance altogether, saying costs were accelerating. With that, Witty was out, replaced by UnitedHealth’s chairman and former longtime chief, Stephen Hemsley. Today, UnitedHealth’s shares are worth about half of their value before the April announcement.” WALL STREET JOURNAL

Paramount Shakes Up Board as Trump Lawsuit Looms

With legal negotiations underway to settle a lawsuit brought by Donald Trump, Paramount has nominated three new directors—potentially tasking a reshaped board with steering the resolution if talks extend

“Paramount Global nominated three new directors to its board and has scheduled its shareholder meeting for July 2, according to its annual proxy filing. The entertainment company, which owns CBS, the renowned movie studio and a number of cable channels, is in the midst of negotiations to settle an election-interference lawsuit by President Trump against its CBS News division. If a settlement isn’t reached before the new directors are elected at its annual shareholder meeting, a new board will have to approve any such settlement. Separately, the media company is also awaiting federal approval of an $8 billion merger with Skydance Media. The board nominees are Mary Boies, an attorney at Boies Schiller Flexner, Charles Ryan, a partner at the venture firm Almaz Capital, and Roanne Sragow Licht, a retired judge, according to the proxy filed Monday with the Securities and Exchange Commission." WALL STREET JOURNAL

Strengthening Long-Term CEO Succession Planning

To instill long-term confidence in leadership pipelines, boards must adopt a deliberate, future-forward mindset—one that prizes strategic optionality and readiness over rigid succession plans

“To ensure resilience in this quickly evolving business landscape, boards need to strengthen their processes to develop long-term CEO succession pipelines. This requires integrating more meaningful options into the succession process. Increasing optionality for top leadership roles is critical, as it allows the board flexibility in decision-making and risk mitigation, making agile, informed choices. Exploring different talent strategies and pathways will also allow boards to enhance value creation, as they will have increased options to achieve desired business results.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

Opinion: Are Interim CEOs a Symptom of Deeper Governance Failures?
In early 2025, CEO departures reached record highs. Interim appointments surged—but behind the numbers is a more troubling signal: boards are increasingly unprepared

“Recent data indicates that nearly 25% of new CEOs appointed in the first two months of 2025 were on an interim basis, a significant increase from 8% during the same period in 2024. This surge suggests that many organizations are unprepared for sudden leadership transitions, often resorting to interim appointments as a stopgap measure…. The appointment of an interim CEO often sends a cautionary signal to the investor community. It may indicate that a company lacks a robust succession plan, leading to concerns about strategic continuity and organizational stability.” FORBES

Governance of AI 2: A Critical Imperative for Today’s Boards
Deloitte’s Second Edition echoes progress on AI, with plenty of room to accelerate

“AI represents an age-defining opportunity for society and business. And right now, most companies are moving at the pace of organizational change, not the pace of the technology itself. The spotlight is on organizations to close the gap and rapidly harness the full potential of new technologies in a way that both enhances their performance and positively impacts their stakeholders. Balancing the opportunities and risks of AI is therefore becoming central to boards’ governance and stewardship responsibilities. Their oversight can ensure AI adoption drives performance and resilience while aligning with organizations’ ethical standards and long-term vision for a trustworthy future.” DELOITTE

Does Your Board Need a Fresh Set of Eyes? 

Organizations thrive on outside perspectives: Sometimes it takes the participation of somebody who isn’t in your association’s bubble to see where your challenges are

“Boards are generally made up of people within an association’s industry, and typically long-tenured members. There are good reasons for that kind of leadership pipeline and industry expertise, but broader perspective-taking isn’t usually baked into board structures…. Different associations will have different levels of tolerance for how much it can support nonvoting “at large” fellows. (And the bylaws may put further restrictions on such a plan.) But ultimately what all associations want are effective and engaged boards, and an outside perspective can help with that.” ASSOCIATIONS NOW

Seat at the Table

Boardspan congratulates Gary Smith, President, CEO, and Board Member of networking systems firm Ciena, on his appointment to the Planet Labs PBC board. Boardspan is delighted to have advised the company on this placement.

• BP announces to its board David Hager, former President and CEO of Devon Energy

• UPS appoints to its board John Morikis, former Chairman, President and CEO of the Sherwin-Williams Company

• GoPro elects to its board Emily Culp, Chief Brand and Strategy Officer of BodyHealth; and Mike Dennison, CEO of Fox Factory Holding

• Health firm The Cigna Group welcomes to its board Michael Hennigan, Executive Chairman of Marathon Petroleum Corporation

• Booz Allen Hamilton Holding Corporation adds to its board Robert O’Brien, former U.S. National Security Advisor

• Ace Hardware elects to its board David Majure, former President of Majure Retail Group

• Havard Bioscience nominates to its board John Duke, CEO of plastic components firm Plastic Molding Technology

• Wellness firm Nu Skin Enterprises adds to its board James Winett, Managing Member of business advisory firm SIZE Advisory Group

• Southern First Bancshares announces to its board Darrin Goss, former President and CEO of the Coastal Community Foundation; Jennie Cluverius, Attorney at law firm Maynard Nexsen; and Billy McClatchey, CEO of Chaucer Creek Capital

About Boardspan
Boardspan helps boards raise the bar on their critical governance mandates by combining cutting edge digital capabilities with high-touch consulting services. They are leaders in board assessments, individual director & CEO evaluations, board succession strategy & search, skills & composition analyses, and bespoke advisory work. Boardspan’s focus is entirely on boards, delivering deep experience, objectivity, an analytical orientation, and insight-driven recommendations. Boardspan works with public, private and non-profit organizations across all verticals including consumer, healthcare, financial services, technology, industrials and non-profit. Specific clients include Archer Daniels Midland, Autodesk, Blue Shield (CA), Boston Beer Company, Colgate-Palmolive, e.l.f. Beauty, HubSpot, Ingersoll Rand, KKR, Lam Research, the PGA, Roblox, Salesforce, the USOPC, and scores more.