By the Numbers: Dramatic Difference in CEO Pay by Company Size, Steven Hall & Partners Survey Shows.

CEOs of Largest 1,000 Companies Paid Five Times Those in Bottom Quintile 

NEW YORK -- When it comes to how and how much CEOs are paid, one size does not fit all. According to an analysis of the largest 1,000 companies in the U.S. by executive compensation consultants Steven Hall & Partners, median 2005 total compensation was $16.8 million for the CEOs at the 27 largest companies, where annual revenues exceed $50 billion. This compensation was five times greater than the median of $3.2 million for the CEOs in the bottom quintile of the study, who lead 251 companies with revenues under $2.5 billion.

Median CEO pay among the 1,000 companies studied accelerates with company size, beginning at $3.2 million and increasing to

* $4.5 million for companies with revenues between $2.5 billion and $5.0 billion;

* $6.6 million for companies with revenues between $5 billion and $20 billion;

* $14.0 million for companies with revenues between $20 and $50 billion;

* $16.8 million at the top tier.

For all 1,000 companies, median CEO pay was $5.0 million.

The Steven Hall & Partners study, among the most comprehensive of its kind, also shows that company size makes a difference in pay structure. The percentage of remuneration in the form of equity (performance / restricted stock and options) and other forms of long-term incentives is highest among the largest companies. Total long-term pay reached 72% of total compensation for CEOs at companies with revenues over $50 billion, compared to 50% at companies with revenues below $2.5 billion.

"The higher the pay, the higher the risk," said Pearl Meyer of Steven Hall & Partners. "As a group, larger enterprises are somewhat constrained as to salary and cash bonus, while they can use equity and other long-term incentives leveraged on future corporate performance and shareholder value as their principal reward vehicle."

Median salaries and median bonuses at the largest companies did not increase from 2004 to 2005, and varied relatively little compared to the same components at smaller companies. For example, median salaries ranged from $731,000 at the smallest companies to $1.5 million at the largest, about two times as great. However, the median value of stock and other long-term incentives reached $12.0 million at the largest companies, or 7.5 times the median value of $1.6 million at the smallest companies.

"Ensuring that CEOs who lead the creation of corporate value and stock market wealth for their shareholders are well motivated and rewarded based on performance is the biggest pay challenge facing boards," said Mrs. Meyer, "but there's no one-size-fits-all solution. Compensation architecture needs to be tailored to each organization's strategy and challenges."

Growth is Higher Among Smaller Companies

Starting at a lower base, CEOs of the smaller companies in the study saw larger percentage compensation increases. Dividing the 1,000 companies into top and bottom halves, median total remuneration increased 11% at the smaller 500 companies, reaching $3.5 million. This compares to median total remuneration of $7.4 million, a 7% increase, at the 500 larger companies. Among the entire group of 1,000 companies, median total remuneration of $5.0 million rose 10% over the prior year.

Performance / Restricted Stock - the New Equity of Choice

While 31% of the top 1,000 companies have abandoned options altogether, the majority still find options to be a useful and viable vehicle. Although the median value of option awards fell 5.3% to $1.2 million, 69% of companies continue to use them as their principal long-term incentive vehicle.

The prevalence of performance / restricted stock as an equity vehicle grew 15% from 2004 to 2005; 50% of companies in the study made such stock awards to CEOs in 2005 and the median value of these awards was $1.7 million. This increase demonstrates the corporate commitment to find a realistic link between pay and performance, representing both stock price and business results.

About the Study

Steven Hall & Partners' "Top 1,000 CEO Compensation" analyzed the most current data available for 801 of the 1,000 largest U.S. public companies. The 199 companies excluded were either privately owned, late filers or no longer existent due to a merger or acquisition. For analysis purposes, companies among the top 1,000 were divided into five revenue groups:

* Revenues under $2.5 billion (251 companies)

* Revenues between $2.5 billion and $5.0 billion (199 companies)

* Revenues between $5.0 billion and $20 billion (254 companies)

* Revenues between $20 billion and $50 billion (70 companies)

* Revenues over $50 billion (27 companies)

Contact Nora McCord at Steven Hall & Partners (212-488-5400, [e-mail]) to request charts and further detail about each of these groups.

About Steven Hall & Partners

Steven Hall & Partners is an independent executive compensation consulting firm serving as outside counsel to Boards, Compensation Committees and management. The firm focuses solely on executive compensation, Director remuneration and related corporate governance matters. Prior to forming Steven Hall & Partners in September 2005, the firm's principals, Pearl Meyer, Steven E. Hall and Steven Root, served as Chair, President, and Managing Director, respectively, of a predecessor executive compensation consulting firm that they founded in 1989. Steven Hall & Partners'offices are located at 645 Fifth Avenue, New York, New York 10022. Telephone: [phone]. Fax: [phone]. www.shallpartners.com.