The total cash compensation for the highest-paid executives in the U.S. finally has risen above pre-9/11 levels to a new high of $3.9 million, according to the February 2006 Chief Executive Total Cash Compensation Index released today by ERI Economic Research Institute and Career Journal.com, The Wall Street Journalís executive career site. The previous total cash compensation record of $3.7 million was set in September 2001 (prior to 9/11.)
This reflects a 5.7% increase in total cash compensation over 2005 levelsórelatively flat compared to the same period in 2004. The index tracks the total cash compensation (salary plus bonus) reported in the previous 12-month survey period for the highest-paid chief executive officers at a selected group of 45 major U.S. businesses.
For the highest-paid executives (based on companies reporting year to date) average base salary in the 2006 Index stood at $1,283,002, compared to 2005 base salary levels of $1,277,944óa 0.40% increase in base compensation over 2005. The highest-paid executivesí average annual cash bonus stood at $2.6 million based on companies reporting for the first period of 2006, compared to the 2005 annual cash bonus level of $2.4 million. This reflects an 8.6% increase in annual cash bonuses over 2005.
ìThe brightening economy has given companies more incentive to reward their executives,î says Tony Lee, publisher, CareerJournal.com. ìRetention is crucial for companies who want stability and growth.î
ìThe 2006 Index reflects the continuing trend of company revenues increasing faster than total cash compensation for the highest-paid executives,î says ERI Director Dr. David Thomsen.
Management pay continues to outpace rank-and-file total compensation advances of 2.8% annually, compared to a statistically friendly, minimum 3.8% rise in the cost of living over the same period.
The Total Cash Compensation Index reflects data submitted in 2004 for a randomly (among monthly reporting dates) selected group of 45 publicly traded companies among the 6,500 that report compensation data to the Securities and Exchange Commission. This average ìcomparablesî group is from the population of publicly traded corporations, which in itself has been decreasing in size (after Sarbanes-Oxley.)
The Economic Research Institute (ERI)/CareerJournal.com Executive Cash Compensation Index and Report can be found at http://www.erieri.com/index.cfm?FuseAction=NewsRoom.Dsp_Release&PressRel.... Tthe supporting charts may be found at http://www.erieri.com/pdf/2006-executive-pay.xls and more information on executive salaries can be found at:
Chief Executive total cash compensation index finds executive compensation rises
.
