New Research Debunks Myth that U.S. CEOs Enjoy Excessive Pay Packages

Just released Chief Executive study finds median 2017 pay was $350,622, not $12.1 million. Here's why.

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Oct 16, 2018, 08:30 ET

STAMFORD, Conn., Oct. 16, 2018 /PRNewswire/ -- The average CEO's compensation is far lower than what media portrays, at least according to new research from Chief Executive Group's 2018-2019 CEO & Senior Executive Compensation Report for Private Companies. This annual report tracks private company CEO & senior executive salary and compensation data across all industries, company types and sizes.

According to the new report, the median CEO total compensation was $350,622 in 2017 (no increase from the prior year). In addition, Chief Executive Research found that the median total compensation package for CEOs of companies with revenues of $1 billion+ is more than five times that of CEOs whose companies generate between $100 and $250 million in revenues.

Of the roughly 30 million businesses in the United States, fewer than 6,000 are publicly traded and only the largest 8% of these public companies make it into the S&P 500. Yet most media outlets repeat the $12.1 million median annual pay package statistic for CEOs of S&P 500 companies in 2017 and leading the public to mistakenly assume that this 0.002% of companies is representative of all CEOs.

Among companies with less than $10 million in revenue, Financial Services and Pharma/Biotech CEOs had the highest median compensation packages. Among companies with $100+ million in revenue, Tech and Real Estate CEOs were also highly remunerated.

In terms of company ownership, CEOs of private equity owned companies had the highest total compensation packages overall, with a median compensation package 87.7% higher than that of sole proprietor CEOs. Yet, among companies with more than $100 million in revenues, CEOs that run sole proprietorships earn only 3.5% less than their private equity owned counterparts.

For the vast majority of companies, CEO compensation is positively correlated with a company's size and complexity (in terms of revenue and number of employees) as well as operating performance (e.g., revenue growth and profitability). While larger and more profitable companies, on average, offer more attractive executive compensation packages, the rate of increase is not as steep as many would expect.

For more information about the 2018-2019 CEO & Senior Executive Compensation Report for Private Companies, which includes benchmarking data by quartile on base salaries, bonuses, benefits, perks and equity compensation for CEOs and 9 other senior executive positions (e.g. President, COO/GM, CFO, CMO, VP Sales, VP R&D , VP HR) and how these benchmarks vary by company size, industry, type of ownership and other key variables, please visit ChiefExecutive.net/compreport.

Contact: Wayne Cooper, 203-930-2702

SOURCE Chief Executive Group