Perks and other personal benefits, such as hired drivers or personal use of company airplanes, rose only slightly.
NEW YORK—Profits at big U.S. companies broke records last year, and so did pay for CEOs.
The head of a typical public company made $9.6 million in 2011, according to an analysis by The Associated Press using data from Equilar, an executive pay research firm.
That was up more than six per cent from the previous year, and is the second consecutive annual increase. The figure is also the highest since the AP began tracking executive compensation in 2006.
The typical American worker would have to labour for 244 years to make what the typical boss of a big public company makes annually. The median pay for U.S. workers was about $39,300 last year. That was up one per cent from the year before, not enough to keep pace with inflation.
The typical CEO got stock awards worth $3.6 million in 2011, up 11 per cent from the year before. Cash bonuses fell about seven per cent, to $2 million.
The value of stock options, as determined by the company, climbed six per cent to a median $1.7 million.
Profit at companies in the Standard & Poor’s 500 stock index rose 16 per cent last year, remarkable in an economy that grew more slowly than expected.
To determine 2011 pay packages, the AP used Equilar data to look at the 322 companies in the S&P 500 that had filed statements with federal regulators through April 30. The sample includes only CEOs in place for at least two years.
Some other findings:
• David Simon, CEO of Simon Property, which operates malls around the country, is on track to be the highest-paid in the AP survey, at $137 million. That was almost entirely in stock awards that could eventually be worth $132 million. The company said it wanted to make sure Simon wasn’t lured to another company. He has been CEO since 1995; his father and uncle are Simon Property’s co-founders.
• Simon’s paycheque looks paltry compared with that of Apple CEO Tim Cook, whose pay package was valued at $378 million when he became CEO in August. That was almost entirely in stock awards, some of which won’t be redeemable until 2021, so the value could change dramatically. Cook wasn’t included in the AP study because he is new to the job.
• Of the five highest-paid CEOs, three were also in the top five the year before. All three are in the TV business: Leslie Moonves of CBS ($68 million); David Zaslav of Discovery Communications, parent of Animal Planet, TLC and other channels ($52 million); and Philippe Dauman of Viacom, which owns MTV and other channels ($43 million).
• About two in three CEOs got raises. For 16 CEOs in the sample, pay more than doubled from a year earlier, including Bank of America’s Brian Moynihan (from $1.3 million to $7.5 million), Marathon Oil’s Clarence Cazalot Jr. (from $8.8 million to $29.9 million) and Motorola Mobility’s Sanjay Jha (from $13 million to $47.2 million).
• CEOs running health-care companies made the most ($10.8 million). Those running utilities made the least ($7 million).
• Perks and other personal benefits, such as hired drivers or personal use of company airplanes, rose only slightly, and some companies cut back, saying they wanted to align their pay structure with “best practices.”
• Military contractor General Dynamics stopped paying for country club memberships for top executives, though it gave them payments equivalent to three years of club fees to ease “transition issues” caused by the change.