Listen to some politicians and you will hear that this or that CEO has a salary or pay of say $25 million.
That’s a whopping number no matter how you slice it, but relative (Megan Kelly is supposedly seeking $20 million a year in salary).
Nevertheless, there is a big difference between salary and total compensation. For the typical CEO of the $25 million, 11.8% is base salary. All the rest is variable pay at risk such as long-term 4.6% and annual bonuses 20.9% which are based on performance.
53.6% is stock awards and stock options. The rest is benefits and perks.
Data Source: Hay Associates study
Realistically the stock awards have value if the stock prices increase which benefits a lot of people from college endowments to pensions plans and 401k plans.
Whether incentive compensation is fairly assessed and earned is an open question as is the accountability demanded by boards of directors.
However, the hysterical claims by politicians need scrutiny. CEOs are the target while the huge salaries earned by celebrities and sports heros are never mentioned. It seems to me one issue to consider is who contributes more to society, who creates jobs and value, who advances the economy through technological and other advances?