Top Executive Compensation Rose, But Not Across the Board

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Nov 17, 2010, 02:00 ET

NEW YORK, Nov. 17, 2010 /PRNewswire/ -- Top executives' compensation fell in some industries and rose in others, and the median CEO of the largest companies took home almost 12 times the amount awarded to the median CEO of the smallest companies, The Conference Board reported today.

Analyzing the most recent proxies from 2,316 publicly traded companies, The 2010 U.S. Top Executive Compensation Report offers a snapshot of executive compensation categorized into 22 industries, along with insights that advance the important conversation about pay for industry leaders and the link between pay and performance.

Total compensation fell in 12 of 22 industries, while total cash compensation increased in 13, remained the same in two, and fell in seven. Total compensation and total cash compensation grew with company size. The median CEO of the largest companies (revenues over $8 billion) was awarded $10.2 million in total compensation, almost 12 times the $877,866 of the median CEO of the smallest companies (revenues under $90 million).

"This may partially explain why compensation-process skeptics may scrutinize the CEO 'peer groups' used for setting benchmark compensation," said Kevin F. Hallock, the report's co-author, professor and chairman of the Department of Labor Economics and director of the Institute for Compensation Studies at Cornell University's ILR School. "Selecting larger companies as peers can boost the percentiles in a comparison group, independent of performance."

Among the report's other findings:

Larger companies generally pay higher salaries and total compensation than smaller companies, but the fraction of compensation delivered as salary decreases as revenue increases.
As in 2009, relative use of each element of compensation varies across industries. Commercial banking has by far the lowest fraction of an average CEO's compensation in stock and options.
CEOs have substantial wealth in their companies. Median vested and unvested holdings both increase substantially as revenue increases.

Source:

The 2010 U.S. Top Executive Compensation Report

The Conference Board

R-1471-10-RR

http://www.conference-board.org/publications/publicationdetail.cfm?publicationid=1880

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