And for many shareholders, their main concern — that pay is just too much, no matter what the form — has yet to be addressed.
“It’s just that total [compensation] is going up, and that’s where the problem lies,” says Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.
The typical American worker would have to labor for 244 years to make what the typical boss of a big public company makes in one. The median pay for U.S. workers was about $39,300 last year. That was up 1 percent from the year before, not enough to keep pace with inflation.
Tita Freeman, a senior vice president at the Business Roundtable, a group of chief executives of large U.S. companies, says that CEO compensation is driven by market forces.
“I can’t tell you precisely what a specific CEO should make, any more than I can tell you what a top-performing Major League Baseball shortstop should make,” Freeman said in an emailed statement.
Since The Associated Press began tracking CEO pay five years ago, the numbers have seesawed. Pay climbed in 2007, fell during the recession in 2008 and 2009 and then jumped again in 2010.
Analyzing data
To determine 2011 pay packages, The Associated Press used Equilar data to look at the 322 companies in the S&P 500 that had filed statements with federal regulators through April 30. To make comparisons fair, the sample includes only CEOs in place for at least two years.
Among The Associated Press’ other findings:
• David Simon, CEO of Simon Property, which operates malls around the country, is on track to be the highest-paid in the Associated Press survey, at $137 million. That was almost entirely in stock awards that could eventually be worth $132 million, some of which won’t be redeemable until 2019. 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.
This month, Simon Property’s shareholders rejected Simon’s pay package by a large margin: 73 percent of the votes cast “for or against” were against.
Shareholder vote
But the company doesn’t appear likely to change the 2011 package. After the shareholder vote, it released a statement saying that “we value our stockholders’ input” and would “take their views into consideration as [the board] reviews compensation plans for our management team.” But it also said that Simon’s performance had been stellar and it needed to pay him enough to keep him in the job.
Simon’s paycheck 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 Associated Press 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).
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