Executive Compensation: Wow

If you have stock in a publicly traded company, you probably received a proxy statement recently. If you also looked at your deferred compensation plan (401K and others), you might have noticed a nice bump in your investments. That bump for you and me has been a bump-plus for CEOs.

The annual executive compensation report from Equilar (a research firm) provides an early look at CEO pay trends, including the largest companies by revenue to file a proxy before April 1. Thomas Rutledge, CEO at Charter Communications, was awarded over $98 million in 2016 and topped the list of highest-paid CEOs. Mark Parker of Nike was the silver-medal winner with $47.6 million, and Mark Hurd, the CEO of Oracle, took the bronze at $41 million.

Overall, median pay for these executives was $15 million in 2016, and they collectively saw a median pay increase of 6 percent over fiscal year 2015—an acceleration compared to pay growth in the previous year’s study. You might have read that elements of the Dodd-Frank Act, like “Say on Pay,” pay ratio, and clawback rules, have been in the news lately related to ethics violations.

Executive compensation may not be on the top of the list for every HR person; however, this time of year serves as a reminder of the connection of pay to performance. For very competitive organizations, this connection is very strong, while organizations that value collaboration focus on different things. For HR professionals, the key is to understand how you compete and design your compensation system to fit your business model and culture.