July 20, 2018
CEO Pay: Biggest Increase Since End of Financial Crisis
– Liz Dunshee
According to Korn Ferry’s survey of the largest 300 companies, median CEO pay increased by almost 9% last year – double last year’s increase & the highest percentage increase since 2010. The increase was driven by both annual & long-term incentive pay along with overall stock market growth. This excerpt predicts what we might see going forward:
Looking to next year, Korn Ferry expects changes in the mix of CEO total direct compensation, due to significant changes to the executive compensation deduction rules in Section 162(m) of the Internal Revenue Code.
“Much will depend on each organization’s financial performance during the coming year, but with the changes in the tax rules governing executive compensation, we expect we will see slightly higher increases in base salaries than in recent years, and that base salary will represent a larger share of the overall mix of TDC for the CEO,” said Donald Lowman, Korn Ferry Executive Pay & Governance Practice Leader for North America.
A change in pay mix could also have a nominal impact on pay ratio: this Korn Ferry blog elaborates on how base pay for the average US worker is increasing at a faster rate than CEO base pay.