Top Executives Paid Double or More Than Their Deputies
The average total compensation for a S&P 500 chief executive was about twice as much as the second most highly paid executive last year, according to a study conducted for the Financial Times by the research group, Salary.com.
However, at student loan group Sallie Mae, the pay of Thomas Fitzpatrick, chief executive, who resigned in May, was more than 10 times that of June McCormack, his executive vice-president.
At more than 30 other companies, the gap ranged from four times to seven times.
The Securities and Exchange Commission is believed to have asked a number of companies to explain the reason for large pay gaps between top executives, as part of a review of corporate pay.
In August, the SEC sent letters to more than 300 companies urging them to be more transparent in their disclosure of executive compensation practices, the FT reports.
The Council of Institutional Investors, whose members have more than $3,000 billion under management, has also voiced concern at large disparities in pay between executives. Investors argue a huge pay differential may be a waste of shareholder funds; indicates the board is not an adequate counterbalance to the chief executive’s powers, and could drive away talented young executives.
Other high-profile companies with above-average executive pay differential include Genzyme, TXU and Heinz.
A spreadsheet of the survey results can be downloaded here.
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