CEO salary pay continues to rise sky high relative to the average salaries of regular Americans, with wild perks and pay that would make even those with six figures blush.
The Economic Policy Institute’s latest research shows that the past three decades saw an extraordinary boom in CEO salary pay. CEO salary pay and bonuses are, in effect, some 200 times larger than the average salary for U.S. workers.
CEO Salary Pay Gets Extreme
Two major highlights from their findings:
Average CEO compensation was $14.1 million in 2012, using a measure of CEO pay that covers CEOs of the top 350 firms and includes the value of stock options exercised in a given year (“options realized”), up 12.7 percent since 2011 and 37.4 percent since 2009. This is our preferred measure.
Average CEO compensation using a measure that covers CEOs of the top 350 firms and includes the value of stock options granted to an executive (“options granted”) was $10.7 million in 2012, 7.1 percent lower than in 2011 though still 9.1 percent greater than in 2009. Firms apparently pared back the value of new options granted because CEOs fared so well by cashing in options as stock prices grew.
And they just keep going up. Consider, for example, the new Lululemon (LULU) CEO salary — at $3.1 million in salary, stock, and bonuses it’s well above that of the former CEO.
And that’s just the beginning. Perks are becoming increasingly common, and the perks themselves are getting bigger and bigger (via 24/7 Wall Street).
Here are just a few examples:
- Oracle Corporation (ORCL) head honcho Lawrence Ellison doesn’t just have a sweet CEO salary, but gets $1.5 million in personal security. That’s just what the company pays him for guards and home security upgrades.
- Discovery Communications (DISCA) CEO David Zaslav reaped $164,00 in private air travel in 2012, on top of his huge CEO salary. Zaslav got $42 million in a compensation package in 2010, $52 million in 2011, and $50 million in 2012.
- Chevron (CVX) CEO John Watson got a pension worth $6 million in 2012. A pension. That’s on top of Watson’s compensation of $32.2 million in 2012. Well, to be fair, he may need it since GMI/The Corporate Library, an independent investment research firm, downgraded the company’s shares to a “D.”
The United Way CEO salary has often been brought to light — and often questioned considering the organization is a charity. Yet United Way CEO Brian Gallagher received a compensation package of more than $1 million. That’s a lot of money that people think is going directly to those in need, but is actually going to a millionaire.
Still, there will always be controversy of the CEO salary — especially as average salaries pale in comparison.
The policy institute’s report notes, with just a bit of irony, that while CEO pay ratio to the average worker hit 380-to-1 in early 2000, the stock market crash dropped that number down. But with a bit of plucky lucky, it’s on the upswing again, though it’s still far below it’s high.
Today, it’s only 272 times larger than the average American worker.
