AP Exclusive: CEOs got biggest raise since 2013
NEW YORK (AP) — The typical CEO at the biggest U.S. companies got an 8.5 percent raise last year, raking in $11.5 million in salary, stock and other compensation last year, according to a study by executive data firm Equilar for The Associated Press.
Boards of directors increasingly require that CEOs push their stock price higher to collect their maximum possible payout, and the Standard & Poor's 500 index returned 12 percent last year.
Compensation dropped for nine of the 10 companies scoring the lowest on "Say on Pay" votes, where shareholders give thumbs up or down on top executives' earnings.
Other measures that would highlight the income gap between CEOs and typical workers are on the way, but governance watchdogs worry that Congress will kill or dilute their strength.
When the shareholders of Exelon met in Philadelphia for their annual meeting last spring, the energy company asked what they thought about how much CEO Christopher Crane and other executives made in the prior year.
Auto supplier BorgWarner had last year's second-lowest passing rate on "Say on Pay," with 60 percent of voting shares saying no or abstaining.
When a company gets a poor showing on its "Say on Pay" vote, though, "companies do take it seriously," said Kelly Malafis, a partner at Compensation Advisory Partners, an executive-compensation consulting firm.
"The Say on Pay vote has been a real game changer," said Amy Borrus, deputy director of the Council of Institutional Investors, which represents pension funds and other big investors that manage $23 trillion in assets.
The AP's CEO compensation study includes pay data for 346 executives at S&P 500 companies who have served two full consecutive fiscal years at their respective companies, who filed proxy statements between January 1 and May 1.