New research by Chief Executive Group debunks the myth that most CEOs enjoy excessive pay packages. According to the CEO & Senior Executive Compensation Report for Private Companies 2012-2013, the median compensation package for CEOs of private companies is currently $362,900, not the $9.6 million average CEO compensation figure that is mistakenly reported by most media outlets.
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According to a press release, most media outlets repeat the $9.6 million average annual pay package statistic for CEOs of S&P 500 companies in 2011 and mistakenly assume that this 0.002% of companies is representative of all CEOs.
Median compensation for private company CEOs is up 1.9 percent from 2010’s $356,133, less than the rate of inflation (3.2 percent in 2011), and far less than the rate of growth of public company CEO compensation packages.
Chief Executive Group’s research found that, in contrast to media portrayals, for the vast majority of companies, CEO compensation is positively correlated with a company’s size and complexity (in terms of revenue and number of employees) as well as operating performance (e.g., revenue growth and profitability).
While larger and more profitable companies, on average, offer more attractive executive compensation packages, the rate of increase is not as steep as many would expect and there are key size thresholds. There are also large differences by industry and type of ownership (e.g., private equity, venture capital, family, sole proprietor or partnership) that are highlighted in the report.
For more information about obtaining the CEO & Senior Executive Compensation Report for Private Companies 2012-2013, which includes benchmarking data by quartile on base salaries, bonuses, benefits, perks, and equity compensation for CEOs and 9 other senior executive positions HR) and how these benchmarks vary by company size, industry, type of ownership, and other key variables, go to www.ChiefExecutive.net/CEOcompensation.