CEO Compensation Declined in 2008

Taxpayers outraged by corporate bonuses may want to put their pitchforks down, for the moment. According to today's Wall Street Journal, CEO compensation declined in 2008 — at least at the nation's largest public corporations. The decline was the first in seven years and only the second since The Journal began tracking CEO pay in 1989. The compensation analysis was conducted for the newspaper by Hay Group, a management consulting firm, which examined proxy statements for companies with more than $5 billion in annual revenue. It found that median salaries and bonuses for CEOs of those 200 companies fell 8.5% to $2.24 million. Their total compensation, which includes the value of stock, stock options and other long-term incentives, fell by 3.4% to a median of $7.56 million.

Was this the result of restraint triggered by public anger over executive compensation packages? Maybe not. The packages analyzed were based on contracts negotiated long before the controversy reached a fever pitch with the revelation of AIG's intention to pay $165 million in bonuses to employees, including traders in the financial products unit that nearly brought about the insurance company's collapse. Indeed, most of the outrage was aimed at bonuses paid to executives at companies — mostly banks – that received taxpayer-financed rescue funds. A list of bonuses at those companies and of the highest-paid CEOs is included in The Journal's package.

Fore more on the executive compensation controversy, see the Knowledge at Wharton article, "Outrage over Outsized Executive Compensation: Who Should Fix It and How?" and these earlier KnowledgeToday posts: "Wall Street Strikes Back" and "Congress Bares Its Clawbacks."

Comments

New This Week

Several credit cards are fanned out with the text "This Week in Business" and a city skyline icon overlaid at the bottom.
Podcast

How Credit Scores Shape Homeowners Insurance Costs Nationwide

April 10, 202612 min listen

Wharton real estate professor explains how credit scores significantly influence homeowners insurance pricing and financial burden.

Headshot of a person set against a blue background with graphic elements. Text reads: "Walmart," "Donna Morris," and "WHERE AI WORKS in collaboration with Accenture."
Podcast

People-Led, Tech-Powered: Walmart’s AI Job Shift

April 9, 202626 min listen

Wharton’s Matthew Bidwell speaks with Donna Morris, the chief people officer at Walmart, about what it means to introduce AI across one of the largest workforces on the planet.

The image features a graphic with a red speech bubble containing a bar chart and a magnifying glass. In the background, there is a faint blue dollar sign. The text reads "Wharton University of Pennsylvania" at the top and "Marketing Matters"
Podcast

Google’s Vice President of AI and Marketing Strategy, Joshua Spanier

April 9, 202633 min listen

Google marketing executive explains how AI is reshaping customer value, creativity, and marketing strategy.