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Executive Pay Trends - The First 1000 Proxies of 2017 - CompArchive

Executive Pay Trends – The First 1000 Proxies of 2017

Executive Pay Trends – The First 1000 Proxies of 2017

2017-04-04 - 1:35 pm
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We’ve analyzed executive pay disclosures within the first 1,000 proxy statements filed in 2017. Here’s what we’re seeing so far:

  • CEO total pay has increased +7-10%; CFO pay is up +2-6%
  • Increases in pay have been largely driven by full-value share awards, which now constitute the largest component of CEO pay among companies at all revenue sizes
  • Executive turnover rates are down from last year, now at 11% for CEOs and 14% for CFOs
pay-increase-table

The table above illustrates median total pay outcomes (the sum of salary, cash incentives, and the grant date value of equity awards) among companies of various sizes over the last two years. CEO pay outcomes are up +7-10% among all company cuts, with the largest pay increases occurring at the largest companies.

CFO total pay movements are more modest at +2-6%. Here the largest increases appear to be occurring at mid-sized companies, and median pay actually decreased slightly among the smallest company cut.

pay-increase-table

The relative proportion of salary, cash incentives, full-value share awards, and stock option awards varies among companies of different sizes. Stock options constitute a larger portion of CEO total pay among the largest companies, while salary constitutes a smaller portion.

Across company size cuts, changes in CEO pay mix are consistent with longer-term trends. Full-value share awards (including both time-based and performance-based stock awards) continue to constitute a larger fraction of total pay, with these fractional gains generally coming at the expense of cash incentives and stock options.

Lastly, a point on executive turnover: So far, we’ve counted 105 CEO transitions in fiscal 2016, representing an annual turnover rate of 11%. This is down from the 15% turnover rate we observed for fiscal 2015. For CFOs, the trend is similar. 128 transitions were observed in this year’s filings, representing a turnover rate of 14%, down from 20% last year.

These analyses have been conducted using pay and performance information drawn from the CompArchive databases. We’ll be back with a more thorough review of executive pay trends after more proxy statements and annual reports have been filed.

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