Pay for American workers may be stagnant, but those running corporate America had a good 2012. A new study by the compensation research firm Equilar shows that CEOs of big companies earned an average 15 percent more last year than they did the year before.
“It’s unstoppable because once you have these high numbers, everybody wants them,” said Rosabeth Kanter, a professor at Harvard Business School.
The average pay for the 200 most highly paid CEOs was $17.8 million last year, according to Equilar, which compiled the study for The New York Times. Median pay rose 16 percent, to $15.1 million. Equilar only included U.S. public companies with revenue over $1 billion.
A CEO’s pay is generally tied to company performance, and average net income and total shareholder return was in the double digits at the 200 companies.
Kanter cautioned, however, that market gains often mask a CEO’s true performance.
“We often in good times credit CEOs as though they were geniuses, even though they may not have had that much to do with it, and they may be bankrupting the long term in order to get those short-term rises,” she said.
However, as the top-four list confirms, compensation doesn’t always reflect shareholder value.
Oracle’s Larry Ellison claimed the No. 1 spot, pulling down $96.2 million, 24 percent more than in 2011—even though total shareholder returns fell 22 percent.
Activision’s Robert Kotick was paid $64.9 million last year, making him the second-highest paid CEO in the U.S. That’s a 680 percent increase from 2011, despite shareholder returns that fell 12 percent.
CBS’s Les Moonves took a 12 percent pay cut in 2012, earning $60.2 million, even though shareholder returns jumped 42 percent.
Discovery’s David Zaslav also saw a decrease in pay. He made $49.9 million last year, 5 percent less than in 2011. Shareholder returns jumped 55 percent.
–Reported by Mary Thompson