COMP NEWS – CTOs are beginning to outpace CEOs in some forms of compensation, particularly in base salary packages.
How much of a base salary increase did CEOs and CFOs receive in 2022?
Compensation Advisory Partners (CAP), an executive compensation consulting firm, exclusively shared with Fortune data on salary, bonuses, and equity payouts that provides a sneak peek. The report data is based on 50 cross-industry S&P 1500 companies (with median revenue of $4.6 billion and a median market cap of $7 billion) that have fiscal year ends between Sept. 30 and Nov. 30.
Approximately 80% of CEOs and CFOs in the research sample received base salary increases. Of the companies making increases, the median increase was 4.4% and 5.5% for CEOs and CFOs, respectively. Looking deeper, the range of salary increases for chief executives is 3.4% to 7.4% whereas their finance chief counterparts ranged from 3.6% to 9.1%.
Although CFOs are seeing better base salary increases, CEOs still receive higher bonuses and total compensation on average.
Although CFOs had higher base salary increases, CEOs fared slightly better in bonuses and total compensation. Overall, annual bonuses declined compared to the prior year for just over half of CEOs (down 10% on average) and CFOs (down 12% on average). Total compensation increased modestly, on average, for both CEOs (4%) and CFOs (2%). However, 40% of CEOs experienced a change in total compensation that was greater than 25% of their prior year total pay, and this was the case for one-third of CFOs.
CAP’s report also found that equity awards (non-cash compensation) increased by 17%, on average, for both chief executives and finance chiefs. And equity awards made up two-thirds of CEOs’ total compensation, on average, and 56% of total compensation for CFOs. The research also found that CEOs generally saw “more dramatic swings” in incentive compensation in comparison to CFOs, with a higher percentage of chief executives experiencing increases or decreases of 25% or more.
To read more about the comparative compensation increases between CFOs and CEOs, click here.
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