Recruiting Blog

CEO Pay Largely Flat for Second Consecutive Year!

Corporate directors kept CEO pay largely flat in 2012. But chief executives took home more money as the bull market swelled the value of prior stock-based pay, including some particularly profitable awards made during the financial crisis, when stock prices were weak.

The findings emerged from an analysis of annual proxy statements by consulting firm Hay Group and The Wall Street Journal, and highlight the challenges of measuring executive pay.

Even as annual total compensation for chief executives at big U.S. companies is coalescing around roughly $10 million a year, there are still elements of pay packages that can cause compensation to vary widely—even in the same industry.

My experience as an executive recruiter demonstrates that such payouts are more controversial now that investors have become more vocal about CEO pay in the wake of a federal law requiring companies to put their compensation policies up for regular advisory shareholder votes. Therefore when my executive recruitment team does try to recruit a CEO these days, they have to sell more aggressively since boards are more thoroughly scrutinizing such major payouts. This makes our executive recruiting job a lot more difficult. As a result, we have to start selling CEO candidates a lot earlier in the process especially on the relative merits of the new company. Furthermore, we need to more early on convince the executive recruitment team, including their internal management recruiters, to sell these top-notch CEO candidates. If not, they will decide to either: a) stay where they are at or b) be recruited by another executive recruiter who does a better job of selling them on their client’s opportunity!

 


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

* Mandatory field