CEO pay fell just 0.08 percent in 2008

http://rawstory.com/blog/2009/09/despite-turmoil-ceo-pay-fell-just-008-percent-in-2008/

Despite turmoil, CEO pay fell just 0.08 percent in 2008
Thursday, September 24th, 2009

WASHINGTON — Chief executives at US corporations largely maintained their salaries and benefits during the economic and market turmoil of 2008, a survey by a shareholder rights group showed Thursday.

The Corporate Library said its survey of 2,700 publicly traded firms showed median annual compensation for chief executive officers declined by 0.08 percent in 2008.

This indicates "that the link between CEO pay and firm performance remains very weak," said a report from the organization.

"While these findings are historic, in that we have never seen a decline in CEO compensation since we began this series of surveys in 2002, if there were ever an argument that pay is fatally divorced from performance then this is surely it," Paul Hodgson, co-author of the report.

"This minimal decline has to be set against the dramatic downturn in the US equity markets in 2008 when the S&P 500 index fell by more than 37 percent. In this context one might expect CEO compensation to decline, but surely by more 0.08 percent."

The report found some 75 percent of CEOs included in the study received a base salary increase in 2008, up from 73 percent in 2007.

Using a different measure, the survey found total realized compensation was down 6.38 percent. This includes the value realized on vesting of shares, options, pensions and deferred compensation.

"CEOs have had many years of benefiting from the whole of the upside of a bull market," said Hodgson.

"But the whole of the downside of the bear market has been severely mitigated by discretionary bonuses, repriced stock options, mega grants of stock and options, negotiating generous new employment agreements, guaranteed bonuses, and 'retention' awards.

"Paraphrasing the words of Mark Twain, rumors of the death of CEO pay have been greatly exaggerated. In fact, far from falling on its face -- like the economy did -- it has barely stumbled in its steady climb."

The report comes with Congress and the White House increasingly scrutinizing CEO pay and the Group of 20 examining the question of bonuses and packages for the banking sector.