Chief executive officers at the nation's largest companies saw the value of their company stock ownership last year fall sharply last year, according to an annual study by Watson Wyatt, a consulting firm.
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“When the economy prospers and the stock market does well, executives reap the rewards,” says Ira Kay, global director of executive compensation consulting at Watson Wyatt. “But when markets decline, executives also suffer financial setbacks. The financial crisis and market downturn in 2008 bear this out. Even under extreme circumstances, we found that the executive pay-for-performance model is working as intended.”
The stock market recovery this year, however, has mitigated some of the overall loss incurred in 2008. In aggregate, the CEOs analyzed in the study lost a combined $53.7 billion--roughly $55 million for the average CEO--in 2008, compared with $3.2 trillion for shareholders of the same set of companies.