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CEO Pay Day

This week a study was reported on compensation analysis firm Equilar, Inc., which looked at CEO compensation increases in public companies with at least $1 billion in revenue. They found that CEOs, on average, enjoyed a leap in compensation of 16% between 2011 and 2012, as reported in public proxy disclosures. An even more interesting factoid was that the CEOs’ median 2012 pay package came in at $15.1 million. With all the hub-bub that shareholders are making with corporate boards, one would think that growth in these extraordinary packages would be somewhat tempered year-over-year, especially when the average financial performance of these same companies was only a meager 3% higher than the percentage of pay increase. There were a couple of standout pay packages, but one of the best was Yahoo CEO Marissa Mayer who topped out at $31.6 million as the highest-paid woman. I understand that she has made some great moves over her short tenure with the company, but come on, Yahoo remains on the ropes, and a real turnaround is not around the corner. My problem is that companies continue to pay for short-term results instead of rewarding CEOs for investing in innovation and research, or longer-term strategies with pay that is aligned with results.

Tony LoPinto

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