Total compensation disclosed in company proxy statements for chief executive officers at the largest U.S. corporations remained relatively unchanged in 2013, primarily the result of sharply lower pension values. This was among the key findings of the latest in-depth analysis of corporate proxy disclosures conducted by Towers Watson’s Executive Compensation Resources unit, which conducts ongoing research on pay trends for executives and outside directors.
The analysis found that total pay reported in the Summary Compensation Table (SCT) for S&P 1500 CEOs increased less than 1% (0.5%) in 2013, down from the 5.7% median increase CEOs received in 2012. Total SCT pay includes base salary, actual annual and long-term cash bonuses, grant-date value of long-term incentives, such as stock options, restricted stock and long-term performance shares, the value of perquisites, earnings from deferred compensation and the change in the value of pension benefits. The lack of growth in SCT pay for S&P 1500 CEOs in 2013 increases can be attributed to much lower values for executive pensions, driven down by higher interest rates. In fact, if the impact of the change in pension values were excluded from the analysis, total SCT pay would have increased 4.3% in 2013.
As always, CEO pay trends differed widely depending on variables such as company size and which definition of pay is used. Our new Executive Compensation Bulletin provides highlights of our latest proxy analysis, which examined 430 S&P 1500 companies that filed their 2014 proxy statements by the end of March. You can download the Bulletin by clicking on “Download PDF” above or below.
Robert Newbury is a director in Towers Watson’s Arlington, Virginia office who leads the firm’s Executive Compensation Resources unit, and Beth Wright is a senior executive compensation consultant in our Seattle office. Email firstname.lastname@example.org, email@example.com or firstname.lastname@example.org.