The median CEO compensation at very large companies dropped 15.8% in 2007, evidence that companies are responding to demands to link pay to performance, according to Mercer. The decline was driven by an 18.9% drop in long-term incentive values, which make up nearly two-thirds of total CEO pay. The median compensation of CEOs at large companies did not change from the prior year, while midsize company CEOs had a median 4.6% compensation drop. Total median CEO pay at very large, large and midsize firms was $14 million, $9.4 million and $4.7 million, respectively.
Shareholders want (pay for performance), the SEC is asking companies to disclose specific measures and targets, and companies are looking closely at how performance could be affected by an unpredictable economic environment, Peter Oppermann, a Mercer senior executive compensation consultant, said in a news release.
Mercers review showed there was no decline in company-funded perquisites, such as personal aircraft use, club dues and personal financial advice.
Mercer reviewed proxy statements of 350 companies in the Fortune 1000 and divided them by revenue size: the largest having $40 billion or more; large with $7.4 billion or more; and midsize with at least $1.2 billion.