At Select Metrix, we constantly preach that compensation plans should be, in part, tied to an individual’s performance. So when I was reading through my newsletters and RSS feeds, I was amazed to find stats from several different articles and feeds.
First off, CEO turnover is up. The numbers show that CEO turnover for 2005 was 15% compared to 9% just 10 years earlier. Pay is also up, this could be due to the fact that more CEOs are moving around. In 2004 CEO pay increased 14.5% and in 2005 it increased 7.1% with the median salary and bonus coming in at $2,408,665.
With this trend, The Corporate Library (paid subscription required) just published these findings:
Eleven companies that authorized a total of $865 million in pay to CEOs who led their companies to a cumulative loss in shareholder value of $640 billion last year.
Ouch! Those companies may want to think about looking for different leadership and restructure the incentives to be more directly tied to overall corporate performance.