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April 11, 2006
Total Compensation for CEOs Rises 7.1 Percent

Median total annual compensation (base salary plus annual bonus) for chief executive officers rose to $2.4 million in 2005, up 7.1 percent from 2004, according to a study of 350 large public companies by Mercer Human Resource Consulting.

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The study found that the median base salary for chief executive officers remained at $975,000 in 2005, but bonuses for CEOs rose 8.4 percent to $1.4 million.

Mercer said it found signs that companies are aligning compensation with corporate profitability. For example, while total annual compensation for CEOs rose 7.1 percent in 2005, corporate profits increased 13 percent among the 350 companies Mercer studied.

Companies are granting stock options to fewer chief executives but restricted stock to more CEOs, according to the study. Last year, 265 CEOs received stock-option grants compared with 273 in 2004. The number of CEOs receiving restricted stock grants increased from 166 in 2004 to 181 in 2005. In all, long-term incentives acounted for 62 percent of the pay mix for CEOs, the same percentage as in 2004.

Read more about the study at Mercer's website.

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