2011 Brings Alignment Between Performance and Public Company CEO Pay
May 24 2012 by ChiefExecutive.net
After 2010, when there was no correlation between company performance and CEO pay at the largest public companies, compensation was back on track in 2011 with the implementation of Dodd-Frank reforms.
The Wall Street Journal reported that in 2011 public company CEOs were paid 0.6% more for every 1% returned to shareholders and were paid 0.6% less for every 1% decrease in shareholder return. This was not the case in 2010, however, when CEOs were paid 0.2% more for every 1% decrease in shareholder return.
Of course, there are only 5,500 public companies in the U.S. The vast majority of CEOs run private companies, where their pay has been more aligned with value creation traditionally. Chief Executive explores the pay practices of private company CEOs and senior executives in its 2011 CEO and Executive Compensation Report for Private Companies. To learn more and order this report, click here.