CEO Pay Shrinks 4.6% but Offers Weak Reflection of Performance
By: Wall Street Journal
June 2, 2016
Median pay for chief executives of the biggest U.S. companies slipped 4.6% last year, but the link between annual compensation and shareholder returns remained weak.
A Wall Street Journal analysis of S&P 500 companies found that none of the year’s 10 highest-paid CEOs ran one of the 10 best-performing companies. Only three of those executives led a company ranked among the top 10% in total shareholder return.
More broadly, the best-performing tier of CEOs in the analysis received the lowest median compensation for the year, at $10.2 million.
There was little correlation between executive pay and annual corporate performance, even within the same industry. In six industries, including utilities and diversified financial services, the year’s top-paid CEOs ran the worst-performing companies. In seven industries, including pharmaceuticals and retailing, the lowest-paid CEOs ran the best performers.
Some articles require a paid subscription.
