WALL STREET JOURNAL: A substantial part of American CEOs’ pay is now tied to performance. But that doesn’t mean their compensation follows their results in lockstep.
The Wall Street Journal’s annual pay survey looked at compensation for 300 CEOs and the returns the chiefs delivered to their shareholders. Broadly speaking, CEOs did well when their investors did. All 10 of the CEOs posting the best shareholder returns were paid more than they had been a year earlier, and all but two of the 10 worst performers got pay cuts. The results come as pressure from investors has prompted companies to tie a greater percentage of their top executives’ pay to measurable results…
Companies face heightened risks of conflict with their investors these days when pay gets out of line with performance. The 2010 Dodd-Frank financial law mandates regular nonbinding shareholder votes on pay practices, and activist investors are paying closer attention to compensation. A pending SEC rule will require companies to disclose how well pay for top executives tracks investor return… (more)
