COMP NEWS – CEO pay packages continued to rise in 2021, with total compensation for executives rising by over 12% last year on average.
The median pay package for chief executives of the biggest U.S. companies reached $14.7 million in 2021, setting a sixth-straight annual record as strong profits and robust markets boosted performance measures.
Total compensation rose by at least 12% for most of the executives, and most companies recorded annual shareholder returns of nearly 30%, according to a Wall Street Journal analysis of data for more than 400 companies from MyLogIQ LLC.
A large part of CEO compensation often comes in the form of stock options, sometimes accounting for over three-fourths of their total pay.
Roughly two-thirds of CEO compensation comes in the form of stock or stock-option awards, which typically vest over several years. For the 25 top-paid CEOs—each of whose packages exceeded $35 million—equity accounted for 78% of their total compensation. Once again, the highest-paid CEOs were concentrated in the technology and media sectors.
The highest-paid CEOs weren’t necessarily with the highest-performing companies.
Only one of the 25 highest-paid CEOs in the Journal analysis headed one of the 25 best-performing companies: Applied Materials Inc.’s Gary Dickerson, who received $35.27 million in 2021 compensation. The semiconductor-equipment maker posted a total shareholder return for the year of 132.6%, well above the median of 29.6%.
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