The Advisors' Blog

Meridian recently published surveys of both CEO and CFO compensation reported by S&P 500 companies for the period 2020 through 2023 (based on proxy statements filed in 2021 through 2024). Here are trends for CEOs:

– Median total compensation in 2023 was $15M – The median compound growth rate of CEO total compensation dropped from 5.4% prior to 2021 to 2.8% since 2021 with the pandemic decreasing pay outcomes. CEO pay grew only modestly above inflation levels over this period.

– Pay growth was volatile, more “saw-toothed” – Compensation fell for many in 2020 due to profound economic downturn, rose in 2021, fell again in 2022 and then increased in 2023.

– Overwhelming majority of CEO pay is delivered in long-term incentives (LTI) – Salaries grew more slowly at ~3% annually while grant values of LTI grew 7%-8% annually; since LTI is reported at its grant date value, realized values can be higher or lower than reported.

– Newer CEOs (much like other roles) earn less than experienced CEOs – Total compensation for CEOs hired in 2021-22 vs. those hired in 2020 dropped, suggesting higher compensation was required to attract a new CEO at the height of the pandemic than in later years.

And here are a few trends for CFO compensation:

– Median total compensation in 2023 was $4.9M – The median compound annual growth rate of CFO total compensation since 2020 was 5.9%, but only 3.2% since 2021 with the impact of the pandemic.

– Pay increased throughout this period albeit somewhat unevenly post-pandemic – Salaries grew at ~3.6% annually while grant values of LTI have grown 6.3% annually.

– Newer CFOs (similar to other roles) earn less than experienced CFOs – Total compensation for CFOs hired in 2021-2023 vs. those hired in 2020 dropped, suggesting higher compensation was required to attract a new CFO at the height of the pandemic than in later years.

– Liz Dunshee