Early Proxy Filers: Target CEO Compensation Increased +6.9% in 2019
Updated: Mar 17, 2020
Median increases to Chief Executive Officer (CEO) compensation in 2019 equaled +6.9% among 2020 early proxy filers. Median total compensation (excluding change in pension values and perquisites) among the 100 CEOs reviewed equaled $7.9 million in 2019. These findings are based on Steven Hall & Partners’ recent study of 100 companies with revenues greater than $1 billion which filed proxies on or after January 1, 2020.
Target total compensation increased for 74 CEOs and decreased for 26 CEOs. Increases and decreases in total compensation were largely driven by changes in long-term incentive (LTI) grant values. Overall, LTI award values increased +7.7% at median.
Target Pay Mix
In 2019, long-term incentives represented 64% of CEO compensation, followed by target bonuses (21%) and base salaries (15%). CEO pay mix has stayed fairly consistent over the last several years.
Annual Bonus Payouts
Bonuses provide the clearest link between pay and performance on an annual basis. In 2019, annual bonus plans paid out at target levels. This represents a decrease from 2018, when the median equaled 110% of target.
Median Annual Bonus by Industry
As mentioned above, the increases and decreases in total compensation observed were largely driven by changes in target long-term incentive grant values.
Target LTI values increased for 69 CEOs, decreased for 26 CEOs and remained consistent year-over-year for five CEOs. Of those five, three CEOs did not receive any LTI awards in either 2018 or 2019.
The below chart shows the distribution of percentage changes to target LTI grant values from 2018 to 2019 for 99 CEOs. One CEO did not receive an award in 2018 but did in 2019.