Everywhere you look recently, the headlines say CEO pay is going down. Last week, the Wall Street Journal’s annual survey found that median salary and bonuses for CEOs of 200 big U.S. companies fell 8.5% last year. Over the weekend, the New York Times’ study, which uses data from compensation research firm Equilar, found that median total compensation was down 9.4% last year. Equilar released its own press release today, saying that overall CEO pay fell by 6.8% from 2007 to 2008, the first significant drop in seven years. That was driven mostly by steep drops in cash bonus payments, the firm noted, which dropped 20.6% over the same period.
But hold on a moment. Now comes a preliminary “sneak peek” report on executive pay from The Corporate Library. Its compensation analysts randomly selected 21 companies who filed their annual reports between January and mid-February and found something different. The Maine-based governance watcher, which plans a comprehensive report this summer, found that among these 21 companies, base salaries actually increased 7.5%. While the preliminary study doesn’t report total compensation declines or increases, the study authors do note that some companies—mentioning Monsanto, Tyco and Apple—continued to pay out substantial bonuses or vest lucrative equity awards.
Even more notable were adjustments made to bonus targets. The Corporate Library’s report mentions that at Navistar, D.R. Horton and Analog Devices, bonus targets or metrics were adjusted so that they might be more easily achieved in a tougher environment. “With a general weakening of the target-setting process,” wrote report author Paul Hodgson, a senior research associate, “any decline would seem unlikely to reflect accurately the decline in company fortunes.”
One other notable finding from the study: At least two companies explained part of their salary increases as the result of consolidating perks into salary-based pay. Natural gas distributor and provider UGI said in its proxy that its CEO’s “salary increase includes a modest adjustment to compensate for the discontinuance of certain perquisites as reported in Fiscal 2007.” And at Provident New York Bancorp, 3.2% of the CEO’s salary increase was paid out “in lieu of a country club membership and a vehicle.”
The Corporate Library’s study is small in scale, to be sure, and it will be interesting to see if their findings hold as they broaden their study. But they aren’t the only ones to find that pay may still be going up. Executive compensation expert Graef “Bud” Crystal finds that total pay actually went up 2% in 2008 in his study of 64 large companies that have market caps of at least $10 billion and where the CEO has been in place for two years or more. “What?” Crystal writes in his report. “You expected CEO pay to drop? Get real.”
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