The Advisors' Blog

Median CEO total direct compensation was up 4% in 2022 among a select number of companies surveyed by Compensation Advisory Partners, according to a recent memo. CAP looked at 50 companies with fiscal years ending between August & October, finding that long-term incentive awards were driving the modest increase – at a time when financial performance was up, but stock market declines pushed down total shareholder return. Here are more details:

– Performance: 2022 financial performance – as measured by revenue, pre-tax income, and earnings per share (EPS) – was strong, with median revenue (+11.8%), pre-tax income (+10.0%), and EPS (+8.9%) all up, though modest compared to 2021. One-year total shareholder return, or TSR, was down year-over-year (-16.4%).

– CEO Pay: Median CEO total direct compensation increased +4% year over year, driven by a 15% increase in the grant-date value of long-term incentives (LTI). While median bonus payout was down -8% from last year, 2021 was a year of high payouts.

– Annual Incentive Payout: Overall, 2022 median bonus payout for CEOs was above target (119% of target). While this is lower than 2021 (when median payout was 149% of target), two-thirds of companies in this study had a payout at or above target, reflecting continued strong financial performance. Payout for the CEO was generally in line with the corporate payout factor (i.e., the percentage at which the annual incentive funds based on company performance) as companies were less likely to make discretionary adjustments (up or down) to CEO pay.

– Say on Pay Results: For the third year in a row, median say on pay support was 95%. We saw a sharp increase year over year in the number of companies receiving 80% or higher support (98% this year vs. 88% last year).

Check out our “Determining How Much Pay is Appropriate” Practice Area for more resources and surveys on pay levels.

– Liz Dunshee