News – For Immediate Release from ERI Economic Research Institute…
REDMOND, WA – November 2008 – During the most recent 12 months, the average total compensation of the highest paid executives in US publicly-traded companies decreased by 4.0%. This continued the decrease in total compensation during 2008, first evidenced in ERI’s August study of executive compensation. While overall total compensation decreased, three components of pay reported increases: non-equity based incentives (up 17.8%), restricted stock awards (up 24.5%), and pensions (up 45.5%). However, the ultimate value of the restricted stock awards and stock options may be affected by the most recent drop in share prices. Decreases were reported in components of base salaries, stock options, LTIP, and “All Other.”
ERI Economic Research Institute created this index of Executive Compensation 11 years ago. Since its inception in 1997, revenues of the US companies studied increased nearly 7 times faster than the dollar amounts paid to the companies’ highest paid executives, with total revenues increasing by 118% compared to an 18% increase for executive compensation.
Compensation Changes during the Past 12 Months
During the past 12 months, Overall Total Compensation of the highest-paid executive decreased by 4%, while revenues increased nearly 7%, with the average top executive receiving Overall Total Compensation of $17,760,518.
Compensation Changes Since 1997
The highest paid executives of US companies saw an increase in Overall Total Compensation of nearly 18% during the past 11 years, but the compensation components reported have changed significantly during this time period due to SEC reporting requirements.
Comparing Revenue growth to Total Compensation growth during this same period shows the average dollar amount of company revenues increased by nearly 118% as compared to 18% for total compensation. This means the dollar revenues increased nearly 7 times faster than the average dollar amount of the Executive Total Compensation Package.
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