Typical CEO made $9.6 million last year
The head of a typical public company made $9.6 million in 2011, according to an analysis by The Associated Press. The typical American worker would have to labor for 244 years to make what the typical boss of a big public company makes in one.
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— Of the five highest-paid CEOs, three were also in the top five the year before. All three are in the TV business: Leslie Moonves of CBS ($68 million); David Zaslav of Discovery Communications, parent of Animal Planet, TLC and other channels ($52 million); and Philippe Dauman of Viacom, which owns MTV and other channels ($43 million).Skip to next paragraph
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— About two in three CEOs got raises. For 16 CEOs in the sample, pay more than doubled from a year earlier, including Bank of America's Brian Moynihan (from $1.3 million to $7.5 million), Marathon Oil's Clarence Cazalot Jr. (from $8.8 million to $29.9 million) and Motorola Mobility's Sanjay Jha (from $13 million to $47.2 million).
— CEOs running health-care companies made the most ($10.8 million). Those running utilities made the least ($7 million).
— Perks and other personal benefits, such as hired drivers or personal use of company airplanes, rose only slightly, and some companies cut back, saying they wanted to align their pay structure with "best practices."
Military contractor General Dynamics stopped paying for country club memberships for top executives, though it gave them payments equivalent to three years of club fees to ease "transition issues" caused by the change.
The typical pay of $9.6 million that Equilar calculated is the median value, or the midpoint, of the companies used in the AP analysis. In other words, half the CEOs made more and half less.
To value stock awards and stock options, the AP used numbers supplied by the companies. Those figures are based on formulas the companies use to estimate what the stock and options will eventually be worth when a CEO receives the stock or cashes in the options.
Stock awards are generally valued based on the stock's current price. Stock options are valued using company estimates that take into account the stock's current price, how long until the CEO can cash the options in, how the stock price is expected to move before then, and expected dividends. Estimates don't generally take inflation into account.
The shift to stock awards is at least partly rooted in what is known as the Dodd-Frank law, passed in the wake of the financial crisis, which overhauled how banks and other public companies are regulated.
Beginning last year, Dodd-Frank required public companies to let shareholders vote on whether they approve of the top executives' pay packages. The votes are advisory, so companies don't have to take back even a penny if shareholders give them the thumbs-down. But shame has proved a powerful motivator.