2005 CEO Compensation Varies Significantly by Firm Performance; New study finds CEO pay increased 21.3% in 2005 for high performing firms, while CEO pay decreased 14.7% for low performing firms.WALTHAM Waltham (wôl`thăm, –thəm), city (1990 pop. 57,878), Middlesex co., E Mass., a suburb of Boston, on the Charles River; settled c.1634, set off from Watertown 1738, inc. as a city 1884. , Mass. -- DolmatConnell & Partners, Inc., the recognized leader in Results-Driven Executive Compensation(TM), has released a new study that shows CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. compensation varied significantly by firm performance in 2005 among technology industry firms. The study illustrates that CEOs of high performing firms received a median cash compensation increase of 21.3% (including base salary and bonus), while delivering a 35.9% median shareholder return. In contrast, CEOs of low performing firms received a median pay decrease of 14.7% (including base salary and bonus), delivering a -21.7% median shareholder return. Overall in the industry, CEO cash compensation was up 3.7% to $1.723M. Based on early SEC filings for 2005, the study found that companies are moving away from stock options -- which tie compensation to performance -- and towards time-based restricted stock--which doesn't does·n't Contraction of does not. link value to results. Recent analysis shows 59% of tech firm CEOs received restricted stock in 2005 compared to 45% in 2004. Commenting on the study, Jack Dolmat-Connell, president of DolmatConnell & Partners, said "The study shows that most companies are 'paying for performance'." However, there has been an increase in issuing time-restricted stock, which doesn't link value to results. Therefore, the study illustrates some companies are not adhering ADHERING. Cleaving to, or joining; as, adhering to the enemies of the United States. 2. The constitution of the United States, art. 3, s 3, defines treason against the United States, to consist only in levying war against them or in adhering to their enemies, to 'pay for performance' best practices and are not holding their executives accountable when it comes to shareholder value." The study also found that: --Base salaries were down 4.3% to $759K for all firms, up 11.7% for high performing firms, and down 1.1% for low performing firms. --Bonuses were down 5.6% to $988K for all firms, up 22.8% for high performing firms, and down 29.0% for low performing firms. --Total cash compensation was up 3.7% to $1.723M for all firms, up 21.3% for high performing firms, and down 14.7% for low performing firms. --Total long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. incentives (stock options, restricted stock, performance-based LTIP LTIP Long Term Incentive Plan LTIP Laughing Till I Puke LTIP Local Transportation Improvement Program LTIP Long Term Instrument Plan LTIP Long Term Infrastructure Program LTIP Long Term Independent Project ) were down 2.3% to $3.012M for all firms, up 30.3% for high performing firms, and up 5.1% for low performing firms. --Total direct compensation (cash and LTI LTI Linear Time Invariant LTI Long Term Incentive (NZ) LTI Lingua Tertii Imperii (language of the NAZI empire, Latin) LTI Lost Time Injury LTI Leadership Training Institute LTI Lost Time Incident ) was up 20.5% to $5.181M for all firms, up 15.1% for high performing firms, and up 9.0% for low performing firms. --Stock option value was down 14.0% to $1.538M. The number of stock options granted fell 26.4% to 95,000 --Performance-based LTIP(average) was up 28.8% to $1.522M Study includes 44 technology companies with November or December 2005 Fiscal Year ends with tenured ten·ured adj. Having tenure: tenured civil servants; tenured faculty. Adj. 1. tenured CEOs (at least 2 years in CEO role). Median revenues: $1.7B. Performance measured by fiscal year total shareholder return. To learn more about the results or for more information, contact Jack Dolmat-Connell at jackdc@dolmatconnell.com or visit www.dolmatconnell.com. DolmatConnell & Partners will be releasing study results for executive compensation at the largest technology firms (Tech 100) and the largest firms in New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. (New England 100) later this spring. To be added to the firm's distribution list, please email info@dolmatconnell.com. About DolmatConnell & Partners DolmatConnell & Partners (DC&P) is the leader in Results-Driven Executive Compensation(TM), and provides advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to leading public and private companies, ranging from venture-backed startups to Fortune 500 companies. DC&P publishes many industry-leading studies on executive compensation and firm financial results. |
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