CEO Pay Is Down; CEO Replacement Planning Up

Nov 12, 2009
This article is part of a series called News & Trends.

Executive compThe global recession has taken a toll on workers everywhere, but except for a few high-profile departures and bonus forfeitures, CEOs have seemed mostly immune. Now comes a report from Compdata Surveys that says CEO base pay declined an average of 9.3 percent since 2008.

In fact, most of the C-suite has seen their base take a hit, says Compdata, which surveyed some 5,000 organizations across the country to compile its proprietary report Executive Compensation. CIO pay is down 2.1 percent while COOs are down 11 percent.

But unless you happen to hold one of those titles, don’t get all weepy over the news. The average CEO is still earning $346,000 in base pay a year. COOs average $214,000 and CIOs average $175,300.

Only CFO base pay was up. Not much — barely 1 percent — but it was up. The press release from Compdata doesn’t say what the average CFO earns, but it does offer some industry examples: “The average base salary of a Chief Financial Officer in the insurance industry is $232,200, while CFOs in healthcare earn $208,900. The utilities industry pays their CFOs $194,900 on average, compared to those in banking and finance, $191,500. CFOs earn the least in the not-for-profit industry, $173,900.”

Lest you think that these numbers are skewed by the inclusion of some of those highly compensated C-people, even modest-sized firms with 500-1,000 workers pay their CEOs an average of $361,300. At a company with under 100 workers the CEO averages $264,700.

The $600 report has much more information than this, of course. It covers 65 job titles — including HR — and has the data arranged by region and industry, covering bennies like company cars, travel expenses, stock options, and the more usual health, life, and other insurance coverage.

If you decide, despite the decline in salary, to climb up the alphabet titles, keep an eye on your company’s succession plan. Or, if there isn’t one, get one started.

Korn/Ferry says more and more companies are developing them; so many, in fact, that the giant talent management firm issued a press release saying it has seen a 400 percent surge in its CEO succession planning consulting work. And that’s just in the first six months.

The company didn’t offer a number, but it did say, “This is more than twice the number of succession planning projects in the prior two years combined.”

It currently is at work on more than 25 CEO succession planning projects.

“With increased government business regulation, the turbulent business environment and real-time examples of corporate boards that did not have immediate CEO replacements at the helm, we are seeing a significant increase in corporate boards planning for CEO succession,” said Joe Griesedieck, vice chairman and managing director of Korn/Ferry’s Board & CEO Services.

This article is part of a series called News & Trends.
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