While wage growth for many American workers has stagnated, those in corner office are getting a raise: CEO pay at the 500 largest U.S. public companies increased by 6.1% in 2016—the biggest jump since 2013, according to new research from Equilar.
The 2017 CEO Pay Trends report also finds that companies are increasingly paying their CEOs based on performance and steering away from offering bonuses and stock options, with the median pay package coming in at $11 million.
“Median CEO pay packages consistently climbed each year over the five-year study period examined for this report,” writes Matthew Goforth, Equilar Research Manager, in the report. “At the same time, boards continue to tweak incentive pay to align CEO interests with both company strategy and shareholder returns over the long term.”
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Only 50% of the companies offered CEO stock options during the study period, with pay increases being seen as a better long-term incentive. Almost 82% of Equilar 500 companies chose the latter in 2016.
Equilar, an executive compensation firm, also reported that the healthcare sector posted the largest median pay packages last year ($13.3 million). The chiefs in the survey received an average about 32% of total compensation in cash, 65% in equity, and 3% in other compensation in 2016.
