The Associated Press released the following article posted on the NBC News website May 27, 2016:
CEOs at the biggest companies got a 4.5 percent pay raise last year. That’s almost double the typical American worker’s, and a lot more than investors earned from owning their stocks — a big fat zero.
The typical chief executive in the Standard & Poor’s 500 index made $10.8 million, including bonuses, stock awards and other compensation, according to a study by executive data firm Equilar for The Associated Press. That’s up from the median of $10.3 million the same group of CEOs made a year earlier.
The raise alone for median CEO pay last year, $468,449, is more than 10 times what the typical U.S. worker makes in a year. The median full-time worker earned $809 weekly in 2015, up from $791 in 2014.
“With inflation running at less than 2 percent, why?” asks Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
The answer is complicated. CEO pay packages now hinge on multiple layers of sometimes esoteric measurements of performance. That’s a result of corporate boards attempting to respond to years of criticism about excessiveness from Main Street America, regulators and even candidates on the presidential trail this year.
Read More: CEOs Are Making 335 Times More Than Their Workers, Report Says
One bright spot, experts say, is the rise in the number of companies that tie CEO pay to how well their stocks perform.
“There’s progress generally in aligning compensation with shareholder returns,” says Stu Dalheim, vice president of governance and advocacy at Calvert Investments, whose mutual funds look for socially and environmentally responsible companies. “But I don’t think this compensation is sustainable long term, because the U.S. population is increasingly focused and aware of the disparity.”
The top-paid CEO in this past year’s survey, Expedia’s Dara Khosrowshahi, made $94.6 million last year. Most of that came from stock options, which came as part of a new five-and-a-half-year employment agreement and which vest over several years. He’ll get a chunk of those options, currently valued at $30.4 million, only if he’s able to push the stock up to an average of $170 in the run up to his contract’s end in September 2020.
You can read the original NBC post here.