Leslie Moonves, left, president and chief executive officer of CBS, talks with PBS host Charlie Rose in Beverly Hills, Calif. Making $60.3 million in 2012, Moonves was the highest paid CEO of 2012.
ASSOCIATED PRESS Enlarge
NEW YORK — CEO pay has been going in one direction for the past three years: up.
The head of a typical large public company made $9.7 million in 2012, a 6.5 percent increase from a year earlier that was aided by a rising stock market, according to an analysis by the Associated Press using data from Equilar, an executive pay research firm.
CEO pay, which fell two years straight during the Great Recession but rose 24 percent in 2010 and 6 percent in 2011, has never been higher.
Companies say they need to pay CEOs well so they can attract the best talent, and that this is ultimately in the interest of shareholders. But shareholder activists and some corporate governance experts say many CEOs are being paid far above what is reasonable or what their performance merits.
Pay for all U.S. workers rose 1.1 percent in 2010, 1.2 percent in 2011, and 1.6 percent last year — not enough to keep up with inflation. The median wage in the United States was about $39,900 in 2012, according to data from the Bureau of Labor Statistics.
After years of pressure from corporate governance activists unhappy about big payouts, many companies have revamped their compensation formulas. They have awarded a bigger chunk of compensation in stock to align pay more closely to performance, become more transparent about how compensation decisions are made, and in some cases promised to claw back pay from fired executives.
Shareholder activists say the changes are a step in the right direction, yet they argue that CEO pay remains too high and that there is still too much incentive to focus on short-term results.
The Blade reported earlier this month on how much local publicly traded companies paid their top executives. Only two of the 15 CEOs were paid more than the $9.9 national median last year: Gary Heminger of Findlay’s Marathon Petroleum Corp. ($20.6 million) and George Chapman of Toledo’s Health Care REIT ($12.3 million).
Nationally, the highest paid CEO was Leslie Moonves of CBS, who made $60.3 million. He beat the second-place finisher handily: David Zaslav of Discovery Communications, who made $49.9 million. Five of the 10 highest-paid CEOs were from the entertainment and media industry.
For the fourth year in five, health care CEOs received the highest median pay at $11.1 million, while utility CEOs had the lowest at $7.5 million. The median value is the midpoint; half the CEOs in that group made more and half less.
The median pay for women CEOs was higher than it was for men — $11.2 million compared with $9.6 million — although only 3 percent of the companies analyzed were run by women. Irene Rosenfeld of Mondelez International, the snack giant that was spun off from Kraft Foods last year, was the highest-paid female CEO, taking in $22 million.
The third straight year of rising pay coincided with an improving economy and an increase in corporate revenue, profits, and stock prices. The S&P 500 index rose 13.4 percent last year. The median profit increase at the companies in the Equilar study was 6.1 percent, and the median revenue gain was 7.6 percent.
The Top 10 List:
The highest-paid CEOs of 2012, and how their pay changed from 2011:
■ Leslie Moonves, CBS, $60.3 million, down 12%
■ David Zaslav, Discovery Communications, $49.9 million, down 5%
■ Bob Iger, Disney, $37.1 million, up 18%
■ Philippe Dauman, Viacom, $33.4 million, down 22%
■ John Donahoe, eBay, $29.7 million, up 81%
■ Brian Roberts, Comcast, $29.1 million, up 8%
■ Howard Schultz, Starbucks, $28.9 million, up 80%
■ Ken Chenault, American Express, $28 million, up 25%
■ Rex Tillerson, Exxon Mobil, $27.2 million, up 8%
■ Kent Thiry, DaVita HealthCare, $26.8 million, up 53%
Source: Associated Press
Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Comments that violate these standards, or our privacy statement or visitor's agreement, are subject to being removed and commenters are subject to being banned. To post comments, you must be a registered user on toledoblade.com. To find out more, please visit the FAQ.