New York Times Exec Comp Survey Story Minimizes Pay for Performance Discussion, Focuses on Quantum

Executive Pay Legislation and Regulation

This week, the New York Times published its final 2014 executive compensation survey, reporting that the average total pay for the 200 most highly paid executives rose six percent, and while acknowledging "an increase in the proportion of pay based on achieving tangible results," the spotlight was again on outliers and their levels of pay.  Despite the headline, "More Scrutiny, Still Spectacular: CEO Pay Still Huge, as Boards Show Independence," the focus of the article was all about eye popping numbers, both in the aggregate and at individual companies.  Unlike the Times' preliminary report in April, which reported that  median total compensation for the top 100 highest paid CEOs who had filed proxies by that point was $13.9 million, the June update, which incorporated more proxy filings, highlighted the average total compensation—$20.7 million—which was driven by a couple of outliers.  Buried in a companion article, the Times indicated that the median compensation for the June survey was actually $17.3 million.  The Times article zeroed in on the CEO pay arrangements for Cheniere Energy and Freeport McMoRan Copper because of their unusually large total pay, and then admitted that these companies "may have been one-offs."  In addition, unlike the April survey, the June survey selected companies based on their market capitalization, which is more volatile, than by revenue, which is a more typical approach for selecting companies.  On an aggregate basis, the Times reported that the proportion of compensation paid out as stock held steady at 44 percent, but had little else to say analytically about the composition of pay or of pay trends overall.