Incentive And Performance Rewards On The Rise

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    CEOs earned a median total compensation package of $9.65 million with approximately two-thirds of the value coming from long-term incentive grants, says Mercer in its latest analysis of compensation and benefits for CEOs. The report, which in surveyed CEOs at 240 companies in the S&P 500, also says pay in the form of long-term incentives climbed to a median $6.45 million, a median year-over-year change of four per cent. Utilization of time-vesting restricted stock was relatively steady over the past three years (22 per cent of the sample companies granted them in 2013). Performance shares, used by 41 per cent of S&P 500 companies in 2011, became a majority practice in 2013 used by 51 per cent of companies surveyed. Among S&P 100 companies, the 50 per cent threshold was crossed in 2012, and usage increased to 56 per cent in 2013. The prevalence of stock options continued to fall in 2013 with just 25 per cent of CEOs receiving option grants (down 10 percentage points since 2011). The substitution of full-value performance awards for time-vesting option grants is a long-term trend in response to a long-standing criticism that options lack line of sight to actionable goals.