US CEO compensation rose by 8.5 percent in 2016

Research group Equilar published its annual report on CEO compensation this week, revealing that compensation for chief executive officers of US-based corporations rose by 8.5 percent between 2015 and 2016. The median compensation for CEOs in Equilar’s study was $11.5 million.

Compensation for CEOs has risen at about twice the rate of pay for workers; between 2011 and 2016, CEO compensation rose by 19.6 percent. Within the same period, median wages for workers have only risen by 10.9 percent.

Industrial goods companies boasted the highest rate of compensation for CEOs. Companies such as 3M, Caterpillar, and GE awarded their CEOs with a median compensation of $13.2 million in 2016. The healthcare industry, which includes pharmaceutical companies, came just behind with median CEO compensation packages of $12.9 million. The utilities sector came in last in the study for CEO compensation, with median compensation of $9.7 million—still significantly higher than rank and file workers in that industry could ever hope to earn.

Compensation packages for CEOs is intimately tied to stock market performance; boards of directors in 2016 overwhelmingly compensated CEOs with stock and options grants, thus incentivizing executives’ focus on stock price. The Standard & Poor’s 500 index returned 12 percent last year and over the past five years, the S&P 500 has risen by 1,000 points.

Read more: https://www.wsws.org/en/articles/2017/05/26/equi-m26.html