Total compensation for chief executive officers of US public companies in the Russell 3000 Index soared in 2014, up 11.9 percent from 2013 and as much as 34.7 percent from 2010. The performance of the equity market was the main driver of the upward trend. Only a small part of CEO earnings comes from base salary; performance-based components now dominate. Of the top 25 highest paid CEOs in the index, number one reported total compensation of $156 million, up 368 percent from $33 million in 2013. Eight CEOs made the list despite negative one-year total shareholder return generated by their companies.
Published by The Conference Board in collaboration with Arthur J. Gallagher & Co., CEO and Executive Compensation Practices: 2015 Edition documents trends and developments on senior management compensation at companies issuing equity securities registered with the US Securities and Exchange Commission (SEC) and, as of May 2015, included in the Russell 3000 Index. The report has been designed to reflect the changing landscape of executive compensation and its disclosure. In addition to benchmarks on individual elements of compensation packages and the evolving features of short-term and long-term incentive plans (STIs and LTIs), the report provides details on shareholder advisory votes on executive compensation (say-on-pay) and outlines the major practices on board oversight of compensation design. Compensation data is examined and segmented by business industry and company size (measured in terms of annual revenue).