October 5, 2021
CEO Pay in the S&P 1500: Growing, But at a Slower Rate
Willis Towers Watson recently announced results of their 2021 study on CEO pay in the S&P 1500. Here are the key findings, by the numbers:
– 4.7% – Increase in target total direct pay for S&P 1500 CEOs. Target pay for S&P 500 large-cap CEOs increased 5.4%. Pay for S&P 600 small-cap CEOs grew just 3.7% over the prior year, while S&P 400 CEOs saw a 4.4% increase. These figures reflect a slower rate of growth compared with the 6% increase last year, and the lowest results since the 2015-2016 cycle. This was partially due to the pandemic resulting in lower earned incentives at some companies.
– 3.9% – Increase in earned pay for S&P 1500 CEOs, down from the 5.5% increase observed in 2019. Mid-cap CEOs saw the biggest shift in earned pay, moving from just a 0.2% bump in the 2018 – 2019 cycle to a 7.6% increase in 2020.
– 47.5% – Percentage of S&P 1500 CEOs who did not receive a base salary increase in 2020. This contributed to no change in base salary at the median. Performance-based awards continue to be the primary element of CEO compensation programs.
– 102x – 2020 median ratio of CEO pay to median employee for S&P 1500 companies in this study. The pay gap at S&P 500 companies has widened the most over the past three years, reaching 174:1 in 2020. Conversely, the 2020 pay ratio for small-cap CEOs has returned to its 2018 level of 57:1 after an increase to 63:1 in 2019. Median pay ratios vary considerably by industry sector.
– Liz Dunshee