The Wall Street Journal – Median CEO Pay Hit Record of Nearly $12 Million in 2017, Juiced by Markets

March 21, 2018

By Theo Francis and Joann S. Lublin

Most S&P 500 chiefs got raises of 10% or more and median pay rose to $11.6 million, as stock awards swelled.

The chief executives of America’s biggest companies are on track for another banner year of compensation, fueled by a soaring stock market and an improving economy.

Median pay for the chief executives of 133 of the largest U.S. companies reached an all-time high of $11.6 million in 2017, up from $11.2 million in 2016, a Wall Street Journal analysis of proxy statement data found.

The highest paid so far? Hock Tan, the chief of Broadcom Ltd. , who has been at the center of the hostile bid for Qualcomm Inc. His compensation eclipsed $100 million. Others, like IBM’s Virginia Rometty, took a pay cut.

One extreme: Tesla Inc., which is asking shareholders on Wednesday to approve a multibillion-dollar, 10-year stock-option package for co-founder and CEO Elon Musk.

Total pay—including salary, cash incentives, equity, perquisites and more—rose at least 9.9% for half the executives, the fastest annual growth since 2014, while about a quarter of the executives received raises of 25% or more. Most of the gains came from stock awards, as firms largely held the line on cash compensation and stock options.

Companies in the Journal’s analysis reported strong returns, as well, with half posting total shareholder return above 19.1%, improved from 2016’s median total return of 17.5%. Total return reflects changes in a company’s share price and the effect of dividend payments.

Corporate profits surged in many industries last year, fueled by healthy spending by both businesses and U.S. consumers. And investors have pressured boards to better align CEO compensation packages to shareholder returns. The S&P 500 index gained about 19% last year.

Chiefs at industrial and technology companies are leading the list of high-paid CEOs. Broadcom’s Mr. Tan was paid $103 million in the fiscal year that ended Oct. 29, or quadruple what he made the prior year. About $98.3 million of that came as equity grants, and $4.8 million was cash salary and incentive payments. Broadcom posted a total shareholder return of 52% for the year.

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