CEOs got millions after boards ‘neutralized’ the impact of tariffs. Some won’t say what it was worth

Christopher Calio, CEO of RTX, collected $27.7 million in compensation last year. That was his total after the $241.5 billion aerospace and defense giant’s board decided the trade war wouldn’t touch his bonus.

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At its January 2025 board meeting, the compensation committee of RTX, formerly Raytheon, pre-authorized the removal of tariff impacts on business metrics related to Calio’s pay months before President Trump announced a set of sweeping Liberation Day tariffs on April 2, 2025 that upended global supply chains. The RTX comp committee said that the tariff-cost impact “should be neutralized” for determining annual bonus payouts because the tariffs were “externally imposed, unpredictable and unrelated to operational execution.”

Calio’s annual bonus hit $5.1 million, an 85% increase over the $2.76 million the company paid him the year before. How much of that growth was attributable to the tariff exclusion, RTX did not disclose.

Calio wasn’t the only one.

At Ross Stores, the compensation committee approved a similar adjustment on May 21, 2025, the proxy states, stripping tariff costs from calculations used to determine bonuses and long-term incentive payouts. CEO James Conroy collected $17.4 million.

At The Gap, the comp committee adjusted two metrics to account for “the impact of tariffs not considered when the company set its annual budget.” CEO Richard Dickson’s total pay was $17.2 million.

None of the three companies disclosed exactly how much the tariff protection was worth to executives, according to an exclusive analysis released on Wednesday by executive pay consulting firm Compensation Advisory Partners. CAP found that among 22 large public companies with significant tariff exposure, eight boards shielded executive pay from the tariff tumult. The analysis is based on proxy statements filed before April 17, 2026.

“We all know tariffs had an impact on a lot of U.S. companies with operations overseas, or supply chains overseas,” said Shaun Bisman, a co-author of the new CAP report. “Tariffs not only hit income statements, they hit incentive plan design as well.”

Among the 22 companies CAP reviewed, 11 did not mention tariffs in their proxy statements at all, including Amazon, CVS, Johnson & Johnson and Mattel. Of the remaining 11 that did address tariffs in proxy statements, eight made adjustments meant to minimize the hit to incentive plan payouts. Four of the eight—distiller MGP Ingredients, RTX, Ross Stores, and The Gap—did not disclose exactly how much the adjustments boosted executive payouts. Ford, PepsiCo, and Pfizer discussed the impact of tariffs on their businesses but did not protect executive pay plans from the cost.

At Ford, for instance, the automaker told investors it absorbed a $2 billion tariff impact to its adjusted EBIT, but didn’t exclude the cost from its incentive calculations, CAP found.

Margaret Engel, a partner at CAP and co-author of the analysis, said the largest companies, Ford included, were much better positioned to handle a major hit from tariffs.

“But as you get to smaller companies, it gets a lot more difficult,” said Engel. “There’s just less balance sheet strength, less cash flow reserves.”

Plus, the tariff timing was “horrendous” for companies, noted Engel. Many had already locked in their plans with vendors and customers and couldn’t just ratchet up prices overnight to offset the impact of a trade war.

Eye-Opening Results

Among the seven companies that made adjustments for tariffs and disclosed the dollar impact, the numbers are significant and in some cases made the difference between tepid payouts and millions of dollars.

Cooler and drinkware brand Yeti Holdings for instance used an adjusted operating income figure for the purposes of annual incentive pay calculations, adding $38 million to account for tariff costs and thereby lifting annual bonus payouts by 42.6%, CAP found. CEO Matthew Reintjes saw total compensation valued at $7.7 million, including a $1.1 million bonus.

The $38 million add-back was particularly important to Yeti executives since the company’s actual operating income of $269.8 million was below the $283.2 million threshold, which would have given execs a goose egg on the most important metric in the incentive pay formula. Yeti subsequently noted that it tweaked the weighting to 50-50 between operating income and net sales in its pay plan for next year.

Medical technology company Becton Dickinson’s compensation committee raised a performance factor from a calculated 74% to a final 85% of target, a boost of 10 percentage points attributed to tariffs among 11 percentage points total. The committee plucked out the unbudgeted impact of tariffs on adjusted EPS, operating margin, free cash flow, and gross margin, and separately credited management for navigating the tariff exposure. Chairman and CEO Thomas Polen’s total pay was $17.1 million and his bonus was $1.9 million.

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