The median total compensation of CEOs increased 2% last year, down from the 16% rise the previous year, said an analysis by Willis Towers Watson of the summary compensation tables in the proxy statements of 315 companies in the Standard & Poor’s 1500 index, based on filings as of mid-March.
“The modest increase in total pay can be partially attributed to lower values for pension benefits,” said a Willis Towers Watson news release about the analysis. “If pension value changes were excluded from the analysis, the total … pay would have increased 4.8%.”
Weaker corporate and stock market performance and bonuses that increased “a mere” median 3%, also contributed to the lower rise in median pay, the news release said.
Some 53% of the companies paid annual incentive awards to the CEO in 2015, fewer than the 62% in 2014.
”Our findings demonstrate that the pay-for-performance model is working, especially at larger companies,” Andrew Goldstein, leader of Willis Towers Watson’s executive compensation consulting business in North America, said in the release. “Weaker corporate performance in 2015 compared with 2014 had a definite impact on CEO pay and especially on annual bonuses, which are generally linked closely to a company’s revenue growth and earnings.”
Shareholder votes in support of the pay packages of CEOs and other top executive has averaged 90% at 149 companies in the Russell 3000 index so far this year through April 12, roughly the same level of support as in the last five years of say-on-pay voting, the release said.