Dramatic Difference in CEO Pay By Company Size

Median total compensation in 2005 — the last full calendar year for which data is available — was $16.8 million for the CEOs at the 27 largest companies in the United States, where annual revenues exceed $50 billion. This compensation was five times greater than the median of $3.2 million for the CEOs in the bottom quintile, who lead 251 companies with revenues under $2.5 billion according to recent surveys.

An analysis of the largest 1,000 companies in the United States found that median CEO pay accelerated with company size, beginning at $3.2 million and escalating to:

$4.5 million for companies with revenues between $2.5 billion and $5 billion $6.6 million for companies with revenues between $5 billion and $20 billion $14 million for companies with revenues between $20 billion and $50 billion $16.8 million at the top tier

For all 1,000 companies, median CEO pay was $5 million. The study also shows that company size makes a difference in pay structure as well as total value of compensation. The percentage of remuneration in the form of equity (performance / restricted stock and options) and other forms of long-term incentives (LTIs) is highest among the largest companies.

Total long-term pay reached 72 percent of total compensation for CEOs at companies with revenues over $50 billion, compared to 50 percent at companies with revenues below $2.5 billion.

Jeffrey Harris

jeff@harrisandassociates.com

www.harrisandassociates.com