Analysis Finds Eight Companies Adjusted Executive Pay Plans to Account for 2025 Tariffs

Eight large public companies shielded their executives' pay from the financial impacts of President Trump's 2025 tariffs, according to an exclusive analysis released on Wednesday by Compensation Advisory Partners. The firm reviewed proxy statements filed before April 17, 2026, from 22 companies with significant tariff exposure.

Among them, 11 companies did not mention tariffs at all in their proxy statements, including Amazon, CVS, Johnson & Johnson and Mattel.

Of the 11 companies that did address tariffs, eight made adjustments to minimize hits to incentive plan payouts, Compensation Advisory Partners found. Four of those—MGP Ingredients, RTX, Ross Stores and The Gap—did not disclose exactly how much the tariff adjustments boosted executive payouts.

The remaining companies that discussed tariffs but did not protect pay plans included Ford, PepsiCo and Pfizer.

RTX, formerly known as Raytheon, held a board meeting in January 2025 where its compensation committee pre-authorized the removal of tariff impacts on business metrics related to the CEO's pay. This decision came months before President Trump announced sweeping Liberation Day tariffs on April 2, 2025, which upended global supply chains.

RTX's board decided the trade war would not affect the CEO's bonus, and the company made adjustments for its annual bonus and long-term incentives related to tariffs but did not disclose the amount.

RTX did not disclose how much of the bonus growth was attributable to the tariff exclusion.

Ross Stores' compensation committee approved an adjustment on May 21, 2025, stripping tariff costs from calculations for bonuses and long-term incentive payouts, as stated in its proxy. The company disclosed that tariff-related costs reduced adjusted pre-tax earnings by approximately 2%, mostly in the second and third quarters of 2025.

Ross Stores did not disclose the dollar value of the tariff modifications in its 2026 proxy statement but applied the same adjustment to all eligible employees as to the highest-paid executives. A Ross Stores spokesperson stated via email that the payout was generally consistent with the plan had it not been adjusted for tariff costs.

The Gap adjusted the percentage achieved in calculating annual bonus payouts for items including tariffs but did not include a dollar amount or disclose the dollar value in its 2026 proxy statement. RTX, The Gap and Ross Stores modified how they measured executives’ performance to account for tariffs in their 2026 proxy statements.

Yeti Holdings tweaked the weighting to 50-50 between operating income and net sales in its pay plan for the next year.

Becton Dickinson's compensation committee raised a performance factor from 74% to 85% of target, with 10 percentage points attributed to tariffs out of 11 total points. The committee removed the unbudgeted impact of tariffs on adjusted EPS, operating margin, free cash flow and gross margin.

Across seven companies that disclosed tariff adjustments, increases to bonus payouts ranged from 6% to 43%, with a median of 13% and an average of 12%.

Ford absorbed a $2 billion tariff impact to its adjusted EBIT but did not exclude the cost from its incentive calculations. PepsiCo and Pfizer discussed the impact of tariffs on their business but did not protect executive pay plans from the cost.

Shaun Bisman, a co-author of the Compensation Advisory Partners report, noted that companies with operations or supply chains overseas faced challenges. Margaret Engel, a partner at Compensation Advisory Partners and co-author of the analysis, said the tariff timing was horrendous for companies, as many had locked in plans and could not quickly offset impacts.

The Supreme Court struck down President Trump’s tariff program in February 2026, ruling that they exceeded the administration’s authority under the law used.

President Trump stated he would 'remember' companies that did not seek out tariff refunds. Engel said most companies would seek refunds regardless of political pressure. Compensation Advisory Partners' analysis highlighted that smaller companies found it more difficult to handle tariff hits compared to larger ones like Ford.

Bisman indicated that boards often discuss adjustments throughout the year and seek to avoid being in the minority on such decisions.