"The nearly 6 percent growth in executive pay during 2002 is much higher than the increase of 2.7 percent in middle-management cash compensation for 2002 and the rise of only 1.1 percent in rank-and-file compensation that we see reported in our 2003/2004 Salary Planning Survey," says ERI Director Thomsen.
The study also found that executive compensation continued to grow faster than annual company revenues, which rose a meager 0.89 percent in 2002. This measurement can be used to determine an executive's value to stockholders, according to the authors of the study.
Changes in the way executive compensation is shown on proxies may have had an impact on the latest figures, according to the authors of the study.
The Executive Compensation Index tracks the total cash compensation (salary + bonus) for the highest-paid executives at a cross section of 45 major U.S. businesses. The index (1997 = 100) stood at 168.9 for February 2002, compared with 178.9 for February 2003, an increase of 5.9 percent.
The Index results are compiled by ERI/CareerJournal.com each quarter and capture total cash compensation reported in the previous 12-month survey period.
2002, the highest paid executives in America received a 5.9 percent increase in total cash compensation, according to the Executive Compensation Index figures released by ERI Economic Research Institute and CareerJournal.com, the Wall Street Journal's executive career site.