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(MENAFN– EIN Presswire) Key takeaways

The average salary of CEOs in the S&P 500 has increased 4% annually from 2012 to 2023, even with a sharp 11% increase in 2023. The rate of CEO pay movement is aligned with overall pay growth across the US. Economy (4% since 2012 according to the Social Security Median Wage Index), which goes against the broader narrative that executive pay exceeds salaries. That said, a large portion of executive compensation comes from stock-based compensation, which is influenced by stocks. market performance. The 4% annualized growth figure does not take into account wage gains gained from a strong market (14% CAGR from 2012 to 2023 on an S&P500 index assuming reinvested dividends).

CEO pay has increased at an annualized rate of 4% since 2012

Elements of CEO Compensation

Compensation elements have changed to focus more on equity over the past ten years. Base salary and bonuses have become less prominent in salary design and have been replaced by a greater emphasis on long-term incentive (LTI) vehicles (RSUs, options, PSUs). In 2023, the average LTI grant was $10.6 million, up from 2012. On average, LTI accounts for 66% of CEO compensation (up from 54% in 2012).

Other salary benefits have become a much less prominent component of executive compensation. In 2022, only 154 companies provided pension benefits to CEOs, down from 269 in 2012, leading to a significant decline in the percentage of all other compensation.

The S&P 500 has seen a steady rise in CEO compensation, with annualized growth of +4% at the median since 2012, while the technology sector has seen faster growth of +6%. We refer to the “technology sector” as companies with the GICS classification of “Communication Services” or “Information Technology”, which includes large technology companies (e.g. Apple, Alphabet, Amazon, etc.), SaaS, as well as as technology companies. hardware companies. The biggest jump in the tech space came in 2021, driven by the large talent market during the pandemic.

11-year compound annual growth rate of median total salary of S&P500 CEOs

Methodology and assumptions

This research considers the following assumptions and methodology. Pulse on Pay is published every two months.

Summary Compensation Table (“SCT”) figures disclosed (e.g., total compensation, all other compensation, stock awards, etc.)

The S&P 500 experiences changes throughout the year; therefore, each component list is selected as of 12/31 for each given year (for example, fiscal year 2012 includes companies in the S&P500 as of 12/31/2012).

The components of the sector are classified according to the GICS code.

Includes newly hired CEOs, including their grants for new hires.

Excludes part-year CEO layoffs

All data is provided by Main Data Group.

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MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility for the accuracy, content, images, videos, licenses, completeness, legality or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, please contact the provider above.