Sometimes the Economic Equations Are Simple: Declining Union Membership = Lower Wages = Higher Corporate Profits = Higher CEO Pay: Part 4

Soaring CEO Compensation

CEO Pay in Minimum-Wage Hours

“America’s corporate leaders have recovered nicely since the recession. The average worker? Not so much.

“The annual pay for CEOs soared 12.1% last year, the fastest increase since 2010 and up from a median increase of just 1.6% in 2013, according to an analysis by professional services firm Towers Watson & Co. of 500 Standard & Poor’s 1500 companies. Higher pension values, larger annual incentive payouts and higher values of long-term incentives all contributed to the large increase. CEOs at small-cap companies received the largest increase (13.7%) compared with their counterparts at midcap (10.6%) and large-cap (11.6%) companies.

“’Last year was a good year financially for many companies and their shareholders,’ says Todd Lippincott, North America leader of executive compensation at Towers Watson, adding that companies still “carefully manage” their executive pay programs.

Total pay includes base salary, annual and long-term cash bonuses, long-term incentives such as stock options, restricted stock, and long-term performance shares, the value of perquisites — a fancy word for perks of those occupying the executive suite — and earnings from deferred compensation and the change in value of executive pensions, as outlined in the “Summary Compensation Table” in company proxy statements.”

Text from Quentin Fottrell’s “CEO Pay Soared 12% in 2014. How Much Was Our Raise?” MarketWatch 18 Apr. 2015: http://www.marketwatch.com/story/ceo-pay-soared-12-in-2014-how-much-was-your-raise-2015-04-16

 

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