2013 CEO Pay Survey: Stock Option Profits Continue to Pave CEOs’ Path to the Bank

Source: Greg Ruel, GMI Ratings, 2013

GMI Ratings’ 2013 CEO Pay Survey, among the largest surveys of CEO compensation in North America, is based on analysis of North American publicly traded companies. The survey considers 2,259 CEOs whose tenure spanned the whole of the last two years in order to determine changes in executive compensation from 2011 to 2012. Total Annual Compensation represents annual forms of pay including base salary, bonus, and perquisites, while Total Realized compensation includes all elements of annual compensation in addition to equity profits, pension value increases as well as gains in the value of deferred compensation plans.

Key Findings
• CEO Pay increased 8.47% at the median across a matched sample of more than 2,200 North American CEOs.
• S&P 500 pay increased 19.65% at the median.
• Median realized compensation increases were far more prominent at larger companies. While the Russell 2000 saw a 7.62% increase at the median, the figure more than doubles to 15.74% in the Russell 1000.
• Interestingly, median annual compensation increased far more in the Russell 2000 (4.13%) than in the Russell 1000 (1.80%) or the S&P 500 (0.29%).
• This is the first time in the 11-year history of GMI’s CEO Pay Survey that two CEOs named in the Top Ten List of Highest Paid CEOs earned more than $1 billion in a single year, and the first where all 10 CEOs made at least $100 million…

…Our 2013 CEO pay survey marks a third straight year of significant realized compensation increases for North American CEOs. Indeed, the median change in realized compensation from 2011 to 2012 was more than 8%, less than the double-digit increases of the prior two years but still substantial. However, with minimal increases in Total Annual Compensation across our sample, including base salary, the primary trend throughout the survey is that large pay increases in 2012 were mainly fueled by the exercise of large blocks of stock options and the vesting of outsized restricted stock grant…