Compensation Issues

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CEO and CFO compensation: 9 things to know

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Compensation Advisory Partners released a report Sept. 30 about CEO and CFO compensation in fiscal year 2020, based on a sample of 135 companies with a median revenue of $12 billion.

Nine things to know:

Base salaries

1. Base salary adjustments in 2020 were about 10 percent lower than previous years for both CEOs and CFOs. Overall, 44 percent of companies made an increase in CEO base salary and 55 percent made an increase in CFO base salary.

2. Among those that made salary increases, the median CEO increase was 4.1 percent and the median CFO increase was 4.3 percent.

Bonuses

3. About half of companies had lower bonus payouts in 2020 and half had higher bonuses.

Long-Term Incentive

4. CEOs experienced a 5.3 percent increase in long-term incentive opportunities, while CFOs experienced an 8.7 percent increase.

Total compensation

5. Median 2020 increases in actual total direct compensation were 3.3 percent for CEOs and 4.1 percent for CFOs.

6. This is a 1.1 percent decrease for CEOs compared to the prior year because of bonus payouts in 2020.

7. CFO total compensation is about one-third of CEO compensation, similar to past years.

Pay mix

8. The long-term incentive mix moved about 5 percent toward time-based equity, compared to 2019.

9. This trend is expected to continue into 2021, but performance-based equity will be about two-thirds of total long-term incentive.

Read more here.

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