Categories: WSJ

CEO Pay Shrinks 4.6% but Offers Weak Reflection of Performance

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.

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