TodayThe New York Times, published a special report on Executive Pay: The Drought Is Over(At Least for C.E.O.’s), detailing executive pay gains since the 2008-9 recession, paychecks are growing again -in many cases, significantly so.
After falling for two years in the wake of the financial crisis and the recession, executive pay is soaring again. The median salary for CEO’s at about 200 big American companies was $9.6 million, which rose 12% last year in 2010, while the average was up 20%, according to data complied by Equilar. By comparison, average pay for American workers in the private sector rose 2.1% in 2010, according to the Bureau of Labor Statistics.
A Rich Year, and More to Come
Many large corporations have not yet publicly disclosed compensation, so paydays for other executives could surpass those of the 30 CEO’s listed in The New York Times Report. For instance, Leslie Moonves of the CBS Corporation made $43 million in 2009, which would have easily earned him one of the top spots that year. But the company had not disclosed his pay in time for publication.
For many CEO’s grants of stock and stock options in 2010 led to multimillion-dollar payouts. A booming stock market has also meant that many of these executives are sitting on billions of dollars’ worth of paper gains on their stock and stock options.
For example, as of the end of 2010, Ropert Murdoch, the head of the New Corporation, had $4.5 billion in stock-related hodlings in his company. Warren E. Buffett of Berkshire Hathaway had the most share value of any of the 200 CEO’s. He had $46 billion in stock, most of which he has said he will give to charity.
Where Were the Women?
Unfortunately, the women weren’t on this list of the 30 Highest Paid CEO’s. Of the CEO compensation reported, there was only one female that made the 30 Highest Paid CEO List, Susan M. Ivey, of Reynolds Corporation and she was at the bottom three of the list. Although her compensation was nothing to balk at which was $16.6 million, the highest paid CEO on this list is Philippe P. Dauman, CEO of Viacom at $85.5 million(who actually made this in only 9 months). The lowest paid male CEO was James M. Cracchiolo, CEO, Ameriprise Financial at $16.8 million.
The Good News and The Bad
The good news is obviously corporations are doing better than they were in the downturn. Many businesses were hit so hard by the recession that even small improvements in sales and profits look good by comparison. The bad news – so far this recovery hasn’t trickled down. Many of the executives aren’t hiring. Unemployment, although dowm from its peak, stood at 8.8% in March 2011. And few economists predict the jobless rate will drop substantially anytime soon.
Do CEO’s Deserve the Pay?
You get what you pay for. CEOs are delivering value to the shareholders. Are multi-million and billion dollar CEO pay packages really worth it in the end? Dennis Kneale and CNBC.com’s John Carney weigh in.
ASOCIA Executives, a division of ASOCIA Group, is a Global Executive Search and Leadership Advisory firm, serving the world’s largest corporations with top leadership talent. ASOCIA Executives specalizes in female executive placement and leadership development. Visit us at: www.asociaexecutives.com