Median Russell 3000 named executive officer (NEO) pay, excluding the CEO, saw a one-year increase of 13% and an eight-year increase of 56% in 2017, an annual rate of increase that was almost four percentage points higher than the CEO, according to a recent report. "CEO and Executive Compensation Practices: 2018 Edition," a collaboration by The Conference Board, Gallagher, and MyLogIQ, reviewed executive pay disclosures for the Russell 3000 that were published as of May 2018. Additional findings included the following:
- Overall, CEO pay increased 9.9% in 2017. However, CEO pay at larger companies ($25 billion plus) was stable or even declining, with CEOs in the $25-50 billion bracket receiving a 7% decrease in pay. The double-digit increases were in companies under $100 million (21% increase) and $100 million to $1 billion (14% increase).
- Companies continue to grant two or more types of equity in long-term incentive plans, with time-based awards jumping in prevalence from 64% in 2016 to 74% in 2017.
- Compensation-based shareholder proposals that went to a vote declined from 45 in 2016 to 30 in 2017, and were largely focused on specific issues such as clawbacks and pay for performance.
- the median S&P 500 pay ratio was 158:1, while median Russell 3000 ratio was 70:1; new CEO Mindy Grossman of Weight Watchers had the highest ratio at 5908:1 (largely due to her $26.3 million equity buyout and the company's heavy reliance on part-time workers).
- Fewer than 15% of Russell 3000 companies chose to provide supplemental pay ratios; the most common type was to exclude one-time special equity grants or add back health or dental benefits.