March 17, 2019
The Wall Street Journal – Many S&P 500 CEOs Got a Raise in 2018 That Lifted Their Pay to $1 Million a Month
By Theo Francis
The stock market ended 2018 with a swoon but many CEOs in the S&P 500 got a compensation boost.
The strong U.S. economy has created millions of jobs and pushed up wages for many Americans. It also helped many big-company CEOs secure another raise and total compensation worth $1 million a month.
Median compensation for 132 chief executives of S&P 500 companies reached $12.4 million in 2018, up from $11.7 million for the same group in 2017, according to a Wall Street Journal analysis. The gains were driven by robust corporate profits and strong stock market returns for much of the year.
Most of these CEOs received substantial raises—the median was 6.4%—even though the December stock-market swoon meant most of the companies finished out the year posting sluggish shareholder returns.
The strong economy, coupled with concern that a slowdown could be lurking in the wings, likely emboldened many boards to boost pay in 2018, said Robin Ferracone, founder of Farient Advisors, an executive-pay consulting firm.
“Markets did pretty well, companies did well, and the economy held up,” Ms. Ferracone said. “My sense is that they know right now it’s good, they can justify it with pay for performance, and they know they’re going to have to bring it down when the bloom’s off the rose.”
If the pay trends continue for the rest of the companies in the S&P 500 index, 2018 could mark a third straight year for record CEO pay—and one of the starkest examples in years of shareholder performance trailing CEO pay. Investors in the previous two years enjoyed strong returns.
In 2017, the median pay for all CEOs in the S&P 500 at the time was $12.1 million. The Journal’s analysis uses total compensation, including salary, bonus and stock awards as they are valued in securities filings.