Stock awards driving CEO median pay in U.S: report
CEO median pay surged by 7.5% in 2024 to reach a new record high, with the rise driven largely by the increased value of stock and option awards.
Median CEO pay reached $16.8 million during the 2024 to 2025 filing periods, according to a new analysis from ISS-Corporate.
The analysis looked at 320 S&P 500 companies where the CEO was in the same role for the current and previous filing years.
It found that over 69% of S&P 500 CEOs covered in the report received a pay increase, with the median change at 13.2%. Another 31% of the CEOs in the analysis saw their compensation fall in 2024, with the median drop at 7.2%.
But the surge in CEO median pay was not driven by an increase in their base salary, but by the value of median stock awards and option awards.
Median base salary only saw a modest increase of 2.7% over the previous filing period to reach $1.3 million.
On the other hand, the median stock award saw an increase of 6.9% to reach $9.9 million, while the median option award (when granted) saw a six per cent hike to reach $3.3 million.
Industries that saw major increases in CEO compensation include:
On the other hand, a median decrease of 4.4% was recorded for companies in the Food, Beverage, and Tobacco industry.
"CEO pay disclosures at large U.S. companies broadly reflect the strong market performance of last year," said Roy Saliba, managing director at ISS Corporate, in a statement.
In the wake of surging CEO compensation, the report found that large cap companies "generally demonstrated strong total shareholder returns (TSR) over the measurement period."
It saw a 15.1% median one-year TSR for the companies covered in the analysis. Organisations that hiked CEO pay saw a median TSR of 16.8%, while those that lowered pay saw a median TSR of 10.8%.
Notable disparities between median change in CEO pay and median TSR were recorded in the following industries:
Saliba warned that external factors, such as Trump's tariffs, may have an impact on CEO compensation this year.
"Recent market turbulence and ensuing uncertainty around tariffs, a global trade war, and a possible looming recession could raise concerns over significant CEO pay increases at companies that may be facing headwinds in the coming months," he said.
