Pay raises are back in style in the corner office, wiping out cuts from a year earlier and pushing CEO compensation to new highs amid a surging stock market.
Median pay for the chief executives of 104 of the biggest American companies rose 6.8% for fiscal 2016 to $11.5 million, on track to set a post-recession record, according to a Wall Street Journal analysis.
Twice as many companies increased their chiefs’ pay as reduced it, though a few high-profile bosses took substantial pay cuts, including Apple Inc.’s
Tim Cook and General Electric Co.’s
The results, representing about a fifth of the SP 500, suggest the 2015 slowdown in chief executive pay was temporary. Median annual pay for a broader sample of CEOs, disclosed last year, fell to $10.8 million in fiscal 2015, with most getting a pay cut or a raise of less than 1.5%.
The higher pay was doled out as the stock market notched strong gains and corporate profits rebounded over the course of 2016. “If ever there was going to be a good year for CEO pay, it was going to be 2016,” said David Yermack, a finance professor at New York University’s Stern School of Business who studies executive pay.
Much of the higher pay was awarded in various forms of restricted stock or stock options. The compensation increases have come about because rising equity awards have more than made up for declines in cash incentive pay, according to a separate analysis by Institutional Shareholder Services, the large proxy advisory firm.