CEO pay at S&P 500 companies rises 10.6% in 2014
Published: August 27, 2015 - Pensions & Investments
The median total compensation of CEOs of Standard & Poor's 500 companies
reached $11.29 million in 2014, a 10.6% rise driven mostly by increases in CEO
defined benefit retirement values, said a report released Thursday by The
Conference Board and produced in collaboration with Arthur J. Gallagher &
Co.
For Russell 3000 companies, median total compensation of CEOs was $3.89
million, an 11.9% increase driven by the double-digit returns of the equity
market.
In 2014, the total return of the S&P 500 was 13.69% and the Russell 3000,
12.56%.
David M. Zaslav, president and CEO of Discovery Communications Inc., was the
highest paid CEO in the Russell 3000 index in 2014 with $156 million in total
compensation, up 368% from 2013, even though the company stock's total
shareholder return was negative. Discovery's stock returned -23.8% in 2014. For
the previous three years, Discovery's return was 18.9%.
Stock performance is based on total shareholder return as of the end of a
company's 2014 fiscal year.
Mario J. Gabelli, chairman, CEO and chief investment officer-value
portfolios, GAMCO Investors Inc., ranked as the second-highest paid CEO in 2014
with total compensation of $88.5 million, up 4% from the previous year. GAMCO's
stock returned 2.9% in 2014 and 29.8% for three years.
In all, eight CEOs — despite their companies' negative total shareholder
returns in 2014 — ranked among the top 25 highest paid CEOs in the Russell 3000.
Of the eight, Joseph W. Brown, CEO, MBIA Inc., made the top-paid list with total
compensation of $43.6 million, up 730% from 2013, in spite of the company
stock's -6.3% three-year annualized performance, in addition to its -20.1%
return in 2014.
For S&P 500 companies, excluding changes in CEO pension values from the
calculation of total compensation, the median CEO total compensation in 2014
amounted to $10.1 million, only a 4.4% rise from 2013.
For Russell 3000 companies, excluding the pension value changes, the median
CEO total compensation would be $3.78 million, a 10.6% rise from 2013.
The changes in pension value apply only to defined benefit plans, including
actuarial-based executive supplemental retirement plans, both types of which are
less common in smaller companies and the wider Russell 3000 universe. Revisions
to discount rates and mortality tables that extended longevity accounted for the
rise in CEO pension values and are gfactors outside the control of a board of
directors,h said the report, gCEO and Executive Compensation Practices: 2015
Edition.h
Original Story Link: http://www.pionline.com/article/20150827/ONLINE/150829889/ceo-pay-at-sampp-500-companies-rises-106-in-2014