Published March 26, 2012
Corporate profits continued to expand at a healthy pace last year, but CEO pay lagged behind amid missed financial targets and rising criticism of lavish pay packages, according to a new report.
Total direct compensation for 65 CEOs in place for at least two years inched up just 1.4% in 2011, compared with an 11% leap the year before, a survey by The Wall Street Journal and Hay Group reveals.
The study compiled the direct compensation figures by including salary, all bonuses and the value of stock and stock-option grants.
While pay increased slightly, the 75 companies in the study enjoyed a median 17% increase in net income on a median 9% jump in revenue last year, the Journal said. The median return for shareholders of these companies last year was 9.4%.
The study blamed the sluggish pay on increased shareholder pressure on directors to tie CEO compensation more directly to specific financial targets.
For example, Nike (NKE) CEO Mark Parker saw his total compensation fall 5.8% to $12.7 million last year as his company’s 12% jump in profits last fiscal year wasn’t enough to meet three-year revenue and EPS targets, the paper said.
Of course, CEOs aren’t exactly hurting for cash. The median compensation for CEOs in the preliminary survey was $9.4 million, the Journal said.
And some corporate leaders took home enormous pay packages, including Apple (AAPL) CEO Tim Cook who reported compensation of $378 million. Cook’s pay included $376.2 million in one million shares of restricted stock that he was granted when he became CEO in August.