Posted on 04/10/2007 6:53:35 AM PDT by libertarianPA
NEW YORK (Reuters) - American chief executive officers saw their total direct compensation -- an executive pay measure including salary, bonus and incentive shares -- rise 8.9 percent in 2006, a private study showed on Monday.
The study by consulting company Mercer found that CEOs' pay was linked more to performance than in recent years, driven in part by strong corporate results and shareholders returns.
The median total direct compensation for executives at the 350 companies surveyed -- total direct compensation plus benefits and perquisites -- rose to $6.5 million, according to Mercer's study.
Net income at the companies surveyed increased by an average of 14.4 percent for the period, up from 13 percent in 2005, Mercer said. Total shareholder return at the companies was 15.1 percent, more than double the 6.8 percent return in 2005.
"The big story this year is that, as predicted, long-term incentives are being linked to performance," Mercer said in its study, based on the reports of 350 large U.S. companies.
Mercer added that more than half of the companies granted performance shares, or those shares that are earned only if performance goals are met.
CEOs' base salary increased to a median $995,000, after having been at $975,000 for two years, and median total cash compensation -- salary and annual bonus -- rose to $2.6 million, slightly higher than the $2.4 million reported in 2005.
The number of CEOs receiving performance shares, including restricted stock that is doled out according to performance targets, jumped to 178 in 2006 from 111 in 2005, the study found.
Mercer said executives received total compensation for $8.2 million, but that changes in the way companies disclose such information made a comparison with the previous year's figures impossible.
The U.S. Securities and Exchange Commission changed its proxy disclosure rules in 2006, requiring companies to provide expanded information about CEO and other named executive officer pay.
Funny. You never see an article about how much movie stars make get this much attention.
Let's see: Actors play pretend for a living, get awards, wear designer dresses and jewelry, etc. CEOs create jobs affordable products, helping Americans maintain a historically unprecedented lifestyle. And which group gets scrutinized more for their bloated salaries???
I think there’s a small problem in the CEO market only in that most companies are unwilling to promote someone new to the position regardless of demonstrated intelligence and capacity. The only way to become a CEO these days is to start up your own business and bail on it, or get fired from a previous CEO gig.
Obviously that won’t work forever as the price will eventually reach resistance from shortages caused by retirees..
Anyway, CEOs *should* get paid a ton but if I was an investor I would want to pay them 90% in company denominated assets to ensure some performance standards. Heck, everyone should get paid in company ownership.
Didn't Congress limit the deduction of CEO pay to $1,000,000? That's why the CEO's started taking stock options rather than cash.
I really don’t have a problem with the compensation being under 10 million or so. It’s these CEO’s that rake in 3 or 4 hundred million that get my goat, then the company fails, bankrupts or whatever.
Well that guy who made 400 M last year cashed out on about 10 years worth of stock options. I noticed that headline too, but they tried to spin it like a symptom of excess when it was really a story of saving income.
There are more than just the Exxon CEO cashing in these things. I know the press spins it to meet their agenda, but regardless there is still a hugh gulf between average pay at a company and Executive compensation, which is too hugh as far as I’m concerned.
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