NEW YORK - The giant pay gap between US corporate bosses and their workers widened further last year, as chief executive compensation leapt 15.8 per cent.
A survey of 350 of the biggest companies in the US showed the average chief executive took home more than US$6m (NZ$9.8m) for the
first time.
The revelation comes amid continuing shareholder grumbling about excessive pay and as regulators plan an overhaul of the rules on disclosure of boardroom remuneration.
The average chief executive made US$6.05m in 2005, adding together salaries, bonuses, payouts from long-term incentive plans and gains in the value of share options during the year.
That was an increase of 15.8 per cent - in fact, a significant slowdown on the 40.9 per cent rise in 2004, but still many times the 3.2 per cent rise in average earnings for US employees.
The annual survey by the pay advisers Mercer Human Resource Consulting, conducted for The Wall Street Journal, is eagerly awaited to see who is up and who is down in the world of chief executive compensation.
Richard Fairbank, the chief executive of the credit card company Capital One Financial, came out top with remuneration calculated at US$249m, thanks to the soaring value of share options.
Even Mercer's survey is an imprecise science, since there are differing interpretations of how to value share options and much detail still remains hidden.
Yesterday was the deadline for objections to proposed rules to extend the disclosure of executive remuneration to include perks.
Christopher Cox, the chairman of the Securities & Exchange Commission, said greater transparency was needed.
"All markets fluctuate, include the markets for executive talent. Some people are worth more than others, and there ought to be disparities. But one thing's for certain: markets thrive on proper information," he said.
Shareholders have stepped up pressure this year on executive pay, and Mercer said advisers are devising ways to link pay to performance.
It is promoting tools to predict the likely payouts from long-term incentive plans and severance packages, to head off outrages.
Coca-Cola unveiled a plan last week that would pay outside directors in line with earnings per share growth, rather than with a basic salary.
- INDEPENDENT
US chief executives' pay surges 15pc to average of $9m
NEW YORK - The giant pay gap between US corporate bosses and their workers widened further last year, as chief executive compensation leapt 15.8 per cent.
A survey of 350 of the biggest companies in the US showed the average chief executive took home more than US$6m (NZ$9.8m) for the
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