Performance Pays: CEOs See Highest Compensation Increases Since the Recession, According to New Korn Ferry Study
- CEOs Rewarded with Cash and Equity for Strong Corporate Income and Shareholder Returns -
- Median Total Direct Comp for CEOs at Largest US Companies Rises 8.7
That is according to the 11th annual CEO Compensation Study
Median total direct compensation (TDC) for CEOs increased 8.7 percent to
While year-over-year base salaries remained relatively flat, with a 1.5
percent increase to a median of
- Annual bonuses were up 4.1 percent
- Long-term incentive value (LTIs) were up 7.4 percent
When considering the mix of LTIs, performance awards (equity and cash) make up the largest percentage at 56 percent, which is the biggest share of the LTI mix ever recorded in the study. Stock options / SARs made up 20 percent of LTIs and restricted stock accounted for 24 percent.
“In years past, we’ve seen LTI increases but not bonus increases.
However, this year we are seeing increases in both areas,” said
During the period studied, total shareholder return (TSR) was up 17.8 percent. Net income was up 12.6 percent, which is the strongest since 2011.
Looking to next year,
“Much will depend on each organization’s financial performance during the coming year, but with the changes in the tax rules governing executive compensation, we expect we will see slightly higher increases in base salaries than in recent years, and that base salary will represent a larger share of the overall mix of TDC for the CEO,” said Lowman.
About the Study
The 11th annual study, which is conducted by
Tracy Kurschner, 612.309.3957