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Report: CEO Pay Went Up in '08

  • CEO Pay Went Up in '08The Find: Despite a slew of dramatic management failures, CEO pay actually went up in 2008 with a larger percentage of compensation packages given in stock, according to a newly released report.
  • The Source: The Conference Board Top Executive Compensation report.
The Takeaway: With a recession underway since December of last year, you'd expect CEO pay to be going down, but according to a report released by The Conference Board, the opposite was actually the case in 2008: CEO pay increased. The report finds four major trends:
  • Compensation mix is reallocated towards stock. Almost all industries show a reallocation of compensation towards stock and away from total cash compensation and stock options. In financial services (non-banks), for example, the average percent of total compensation delivered in non-equity incentives fell by 2.62 percentage points (from 24.19 to 21.57).
  • Cash may be losing share-but the median CEO still earns more of it. Median cash compensation increased in more than two thirds of the industries studied (as did total compensation overall).
  • Food and tobacco executives are the top earners. Among the 22 industries represented, food and tobacco shows the highest median CEO total compensation... followed by utilities, insurance, and financial services (non-banks).
  • CEOs already have plenty of "skin in the game." Of the largest ten percent of companies in the sample, the median CEO holds almost 100 times (99.97 percent) of his/her salary in total stock and stock options holdings in the company.
With increasing scrutiny of compensation for failing execs, the jury is still very much out on 2009. "Companies must assume their top executives' compensation will come under greater scrutiny from within and without," says Linda Barrington, research director at The Conference Board.

The Question: Is giving CEOs more stock and therefore more of an incentive to focus on boosting short term share price really the way to go?

(Image of prohibitive sign by neubie, CC 2.0)

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