Of the 386 Standard & Poor’s 500 CEOs whose companies reported under the Securities and Exchange Commission’s expanded disclosure requirements this year, salary accounted for only 9.5 percent of total pay. For the 11 CEOs in the group who earned more than $30 million, salary was just 2.7 percent of total pay.
In fact, a few of the CEOs take home a salary of just $1 a year or less!
According to J. Richard Finlay, founder of the Center for Corporate & Public Governance, “Salary has become such a minuscule component of CEO compensation that it is now largely irrelevant.”
So what?
Is it any surprise that CEOs/CFOs of large companies are compensated in stock options instead of a salary? Why should anyone be concerned? Truth be told, I’d rather see top executives compensated with stocks and options because it directly ties their reward with the performance and value they deliver to stockholders.
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June 12, 2007 at 6:34 am
Chris
I used to like CEOs being paid in stock. But now I have to re-think that. Because they will do anything to hype the stock, even post fake returns. Maybe a salary cap like in sports … just kidding. I do think that a CEO making 20 or 30 million is more likely to steal than one making 100 to 340k a year. I not sure why I think that. Maybe I feel that giving someone that much money makes them think, hey I should have the rest.
Chris.