As we enter the peak of proxy season, we review executive compensation trends in the U.S. based on executive pay disclosures so far this year. Our key findings include:
- Compensation disclosures so far suggest continued increases in CEO pay across all market segments and almost all industries.
- The proportion of stock-based compensation as a percentage of total pay continues to increase, crossing the threshold of 50 percent of total pay for large companies for the first time this year.
- Performance-based equity compensation also continues to increase despite concerns of a potential reversal in the aftermath of the repeal of 162(m).
- CEO pay ratios remain relatively unchanged on aggregate, despite some fluctuations observed at individual companies.
More than two-thirds of S&P 500 companies and approximately half of all Russell 3000 companies have filed proxy statements containing executive pay information for the previous fiscal year. Same-store CEO pay levels show a healthy increase, with a median change in same-store S&P 500 CEO pay of approximately 6 percent compared to the previous fiscal year. These are companies that had the same CEO for the most recent two fiscal years. Non-S&P 1500 companies in the Russell index demonstrate the highest increase in same-store CEO pay with a median increase of 7.4 percent compared to the previous year.
