CEO pay increases in US, UK and Canada likely to spur more conflict over compensation
The median annual pay of a chief executive officer at an S&P 500 company rose 8.8 percent last year to $10.5 mn, likely heralding a corresponding increase in interest by large investors and activists in executive compensation issues for 2014.
The median pay, which crossed the $10 mn threshold for the first time in 2013, marked the fourth straight annual increase in executive compensation, according to a study by the Associated Press and Equilar. An S&P 500 CEO now makes 257 times what an average worker earns, up from 181 times in 2009.
The study also shows that female CEOs earned more than their male counterparts, with a median pay of $11.7 mn, although there were only 12 female CEOs in the study, compared with 313 men. It also concludes that the biggest raise last year went to Monster Beverage CEO Rodney Sacks, whose pay jumped 679 percent to $6.22 mn.
The news is likely to spark new concerns among investors and increase the number of conflicts surrounding say-on-pay votes, according to Gary Hewitt, director of research at GMI Ratings.
‘Companies have been happy with their CEO’s performance and the stock market has provided a big boost,’ Hewitt told Associated Press when asked about the study. ‘But we are still dealing with a situation where CEO compensation has spun out of control and CEOs are being paid extraordinary amounts for their work.’
Meanwhile, a review of executive pay at the 100 biggest Canadian companies by consulting firm Global Governance Advisors shows median CEO pay rose to C$5.6 mn ($5.1 mn) last year, almost recovering from the drop during the financial crisis. In 2007, before the crash, the country’s CEOs made C$5.8 mn on average but dropped to $4 mn in 2009.
And a study by the High Pay Centre in the UK shows the median pay of CEOs at firms on the FTSE 100 index rose to £3.9 mn ($6.5 mn) last year from £3.8 mn in 2012, despite new rules meant to encourage companies to show restraint in granting raises to their chief executives.
