There will be much in the media in coming weeks about the rate of CEO pay increases. There will be the usual debate about whether CEOs earned their increases.
Table 2 lists the ten individuals who received the highest percentage increase in total remuneration from 2005 to 2006.
These ten companies represent a current market capitalisation of $20 billion. In total, these companies added more than $8 billion to the value of their shareholders’ investment over the past year. The cost to shareholders (in increased remuneration to the Managing Director or CEO) to achieve this was around $7 million, or less than 0.09% of the increase in shareholder return.
Future newsletters will include more in depth analysis of the link between performance and remuneration increases.
For related articles in this CEO 2006 remuneration increase series see:
Stop Press – CEO 2006 Pay Increases
How Risky is CEO Pay?