CEOs at the country's largest publicly traded companies may not have been big supporters of Donald Trump during his campaign. But in the three months since the election, many are surely happy to see that the value of their personal holdings of company stock has grown -- and substantially so, in some cases.
According to a newly released analysis by Equilar, the executive pay and board data firm, the total stock ownership value held by Dow 30 CEOs in their companies rose nearly $402 million between Election Day and Feb. 10, the week ending the first three-month period since Trump's win. In total, Dow 30 CEOs held $2.2 billion in company stock as of Nov. 7, which grew to $2.5 billion on Jan. 20 and nearly $2.6 billion by Feb. 10, an 18.4 percent rise.
With the Dow Jones industrial average on a tear in recent months, crossing the arbitrary but mythical 20,000 milestone, it should come as little surprise that CEOs' bulging portfolios have done well, too. One analysis found that the stock market run since Trump's inauguration is the fifth-best market gain for a president's first 30 days in office, coming in behind the first month of Franklin D. Roosevelt's fourth election in 1945.
Still, it is striking to see how much value some CEO portfolios have gained in such a short time. In particular, gains in the holdings of two chief executives -- Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JPMorgan Chase -- accounted for nearly two-thirds of the total $402 million gain. According to Equilar, Blankfein's nearly 2.4 million shares grew $146 million in the three months following the election, while Dimon's massive holdings -- he owns more than 6.7 million shares in the bank -- grew by $115.5 million. (The calculation includes shares held outright by the CEOs, not options or restricted stock grants they have been awarded but don't yet have control over.)
Both bank chiefs have had long tenures at their companies and therefore have amassed huge stakes in company stock. Blankfein was a pre-IPO partner at the bank, and Dimon's total includes a purchase of 500,000 shares he made last February -- roughly equal to the value of his 2015 compensation -- as a show of faith in the company amid a rout in bank stocks. Spokespeople for both companies declined to comment on the increase; a Goldman Sacks spokeswoman noted Blankfein's performance-based pay is tied to operational metrics, not stock returns.
Yet both also work at banks whose share prices have rallied on Trump's plans to roll back regulations governing the financial services industry, which were put in place following the financial crisis. "Ultimately, the story here really is Goldman Sachs and JPMorgan," said Dan Marcec, director of content for Equilar. "That has a lot to do with talk of deregulation and the general bullish view on financial markets. That's reflected here."
Other CEOs may be seeing gains because of optimism about Trump's policies -- or potential ones. For instance, shares owned by Kenneth Chenault, CEO of American Express, where tax cuts are seen by some to be a boon for credit card spending, grew by 17 percent, according to Equilar.
In other cases, gains in the value of a CEO's holdings may have little to do with the new administration's policies, but simply be the result of recent company reports. Apple CEO Tim Cook, whose owned shares have grown nearly 20 percent in value in the past three months, according to Equilar, announced record quarterly results in January that included the sale of 78 million iPhones, more than any quarter in the company's history. Shares spiked after that announcement.
Of course, shareholders who are also reaping the rewards of higher share values themselves may not gripe much about CEOs' fattened portfolios. Yet Rosanna Landis Weaver, program manager at As You Sow, a nonprofit that focuses on corporate accountability, says such gains also reveal a disconnect between the pay-for-performance argument boards often use to explain big pay days and market reality.
"At its heart, 'pay-for-performance' is supposed to be about rewarding the CEOs' performance," said Weaver, whose organization recently released a report on overpaid CEOs, "not the performance of the general stock market based on who gets elected or what regulations get passed or eliminated."
Just three CEOs have seen declines in their holdings since the election: Coca-Cola's Muhtar Kent, Wal-Mart Stores' Doug McMillon, and Johnson & Johnson's Alex Gorsky have all seen the value of their stock holdings drop.
Meanwhile, of course, the gains in the value of CEOs' holdings are just that: Gains on paper. If uncertainties around policy persist, Equilar noted in its report, volatility could just as easily bring stocks down. "As we all know, it's rooted in just that: expectations," says Equilar's Marcec. "In six months, we could see this go the other way."