Chief executives of leading financial services companies got an average bonus in 1994 of $1.3 million, 27% less than in a year earlier, according to a survey by executive compensation consultants Pearl Meyer & Partners, New York.
Financial services CEO salaries were up almost 6%, to $729,000 on average. But average total cash compensation, including salary and bonus, dropped 18%, to $2 million.
The survey looked at 21 large commercial banks, investment firms and insurance companies.
The drop reflects the closer alignment between pay and results. Wall Street earnings were down and banks had mixed results, so CEO bonuses followed suit, according to Diane Posnak, managing director.
CEOs at two financial services companies got more than a 100% increase in total compensation, including long-term incentives and the value of stock grants. Compensation of Norwest Corp.'s Richard M. Kovacevich increased to $8.7 million, up 109% from 1993; Richard L. Thomas at First Chicago Corp., saw his total compensation jump to $7 million, up 153%. Both gains were due to substantial option grants in 1994.
CEOs hold an average of 0.9% of the stock outstanding in their companies. As a result, they saw the average market value of these shares drop $13 million, or 29%, to $32 million as of Dec. 31, 1994, from $45 million a year earlier.
By May 24, even with many market averages up more than 15% for the year, company shares owned by CEOs in the survey group, worth $38 million, still had not regained their value of Dec. 31, 1993.