Equilar, a company that collects data on executive compensation, recently conducted an analysis used in a New York Times article. Although the article notes that the data for executive compensation will not be official until companies make their required securities filings for 2012, the preliminary data indicates that the median overall compensation for the 100 highest-paid CEOs of American companies (with a minimum of $5 billion in revenue) rose only 2.8 percent in 2012. However, the “perks’ component of compensation — including payments in the form of free air travel, pension contributions, and life insurance premiums – increased almost 19 percent from 2011. The article lists a number of interesting facts about the compensation of some of America’s famous executives, including:
- The median total pay for the CEOs was $14 million.
- Lawrence Ellison, CEO and founder of Oracle, received a whopping $96 million in compensation in 2012, including $1.5 million for security expenses.
- Steve Wynn, CEO of Wynn Resorts, enjoyed over $1 million in personal travel expenses using the company’s corporate jet.
- Not all CEOs saw their compensation increase in 2012; for example, Ford’s Alan Mulally saw his pay fall 29 percent as the company’s stock declined.
While CEOs of some companies with disappointing 2012 results saw their compensation decline, not all did. Oracle’s stock fell over 20 percent during 2012, yet Ellison was still one of the highest-paid CEOs in the country.
The Times article notes that the Dodd–Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, allows shareholders of public companies to take a non-binding vote on the propriety of their CEO’s compensation. But boards of directors are free to disregard any shareholder vote on the subject, and in any event, shareholders rarely muster enough outrage to take a stance; one study, surveying 3,100 executive compensation plans, found that shareholders disapproved of a mere 43.