CEOs at the biggest U.S. companies saw their pay jump sharply in 2010, as boards rewarded them for strong profit and share-price growth with bigger bonuses and stock grants.
The median value of salaries, bonuses and long-term incentive awards for CEOs of the 350 biggest companies (that filed proxies between May 1, 2010, and April 30, 2011) surged 11% to $9.3 million, according to a study of proxy statements conducted for The Wall Street Journal by management consultancy Hay Group.
CEO pay was measured as total direct compensation — salary, bonuses and the granted value of stock, stock options and other long-term incentives given for service in fiscal 2010. Excluded were the value of exercised stock options and the vesting of restricted stock.
Viacom Inc. CEO Philippe P. Dauman topped the list with compensation of $84.3 million. (The Year’s Highest Paid CEOs – WSJ.com, May 9, 2011). The article goes through the pay of several more of the highest paid. As I have mentioned before, the huge discrepancy between CEOs and average or even reasonably high paid professional is bad for companies, shareowners and society. That’s why I have been voting against pay above median for companies in my own portfolio.
Over the years, I’ve discussed “say on pay” many times with Abe Friedman, the former Global Head of Corporate Governance and Responsible Investing at BlackRock and Barclays Global Investors, and have been favorably impressed with his analysis.
Friedman recently met with members of the SVNACD. I’ve been to many previous events with that group but missed this one. However, I was happy to see Friedman voicing his opinion via video so that a wider audience could hear his thoughts. After listening to him I now feel, even more, that I shouldn’t just be voting down half the say on pay proposal; I should also be voting against half of the directors that sit on compensation committees.