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CEO Pay Is Rising Twice as Fast as Workers' Income

Published: May 23, 2017 3 min read
Beauty And The Beast New York Screening
Disney Chairman and CEO Robert Iger was one of the highest-paid executives in 2016.
Taylor Hill—FilmMagic

The Associated Press reports that American CEOs got an 8.5-percent raise last year, taking in a median of $11.5 million in salary, stock, and other compensation. It's the biggest CEO pay increase in three years.

The raises are a reflection of the bull market in stocks.

"Boards of directors increasingly require that CEOs push their stock price higher to collect their maximum possible payout, and the Standard & Poor's 500 index returned 12 percent last year," the AP reported.

Over the last five years, median CEO pay in the survey has jumped 19.6 percent, not accounting for inflation, according to data compiled with executive compensation group Equilar. That's nearly double the 10.9-percent rise the average full-time employee has seen over the same period.

CEOs typically got more than half their total compensation from stock and option grants last year, the AP reported.

Equilar previously announced that the highest-paid CEO of 2016 was Charter Communications' boss Thomas Rutledge.

The top-5 highest-paid CEOs in the new survey are all in digital communications or entertainment:

  1. Thomas Rutledge, Charter Communications: $98 million
  2. Leslie Moonves, CBS: $68.6 million
  3. Robert Iger, Disney: $41 million
  4. David Zaslav, Discovery: $37.2 million
  5. Robert Kotick, Activision Blizzard: $33.1 million

If you're wondering why these executives make more than the tech CEOs who usually find themselves in the headlines, it's because many of them have joined the "$1 salary club" because their net worths are astronomical. This group includes Mark Zuckerberg and Elon Musk. The salary of Amazon's Jeff Bezos, who is among the top three richest men on earth, is officially less than $82,000 per year.

The new Equilar survey covered the 346 CEOs who have served in that role at an S&P 500 company for at least two years as of fiscal year end 2016. The 21 female CEOs in the survey earned a median of $13.1 million, down from $18 million last year.

The male CEOs earned $11.4 million, up from $10.5 million last year.

California had the most CEOs in the survey, with 40, while New York CEOs saw the highest median pay, at $15.3 million.