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C.E.O. Compensation: Less Is More
In recent years, some people have complained that bonuses for chief executives have been based on a rather simplistic formula: You exist, you get.
But a preliminary review of 2007 compensation deals found that the median value of C.E.O. bonuses — brace yourself — actually declined by 4.5 percent last year.
Don't get too worked up. The study, published today by the executive compensation-consulting firm Equilar, notes that last year's drop was small compared with the 27.1 percent rise in 2006.
Equilar's research also discovered that, overall, the number of chief executives receiving annual incentive bonuses actually increased slightly last year.
There was more solace for the executive set in the study's finding that the median C.E.O. salary increased by 8.6 percent from 2006 to 2007. (That is down from a 9.7 percent increase in 2006.
Equilar, based in Redwood Shores, Calif., said it reviewed results at 108 companies with revenues of more than $1 billion who reported year-end results on or after Aug. 31, 2007.
"This is a tip-of-the-iceberg study," Equilar spokesman Alexander Cwirko-Godycki said. "There is much more on bonuses to be reported."
Spurred by recent economic slowdown and credit market deterioration, annual bonuses are likely to receive increased scrutiny in the upcoming proxy season, Equilar concluded.
by Elizabeth Olson
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