ROCKVILLE, Md. (July 5, 2023) – ISS Corporate Solutions, Inc. (ICS), a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, today announced the results of an analysis of CEO pay at large capital companies in the U.S. and U.K. The study examines differences in CEO pay levels between the S&P 500 and FTSE 100 in the five-year period between filing years 2019 and 2023, considering the individual components of pay including base salary, short-term incentives (STI), and long-term incentive (LTI) plans.
Key takeaways from ICS’ analysis include:
- CEO pay growth at S&P 500 companies markedly outpaced that for FTSE 100 companies between 2019 and 2023.
- The analysis found that S&P 500 median CEO pay increased 23 percent while median market cap rose 52 percent and median revenues rose 40 percent; conversely, FTSE 100 overall median CEO pay rose just 1.1 percent, but market-cap levels remained flat in spite of median revenues rising 20 percent.
- The increase in the LTI component of pay for S&P 500 company CEOs is the main driver of the widening pay gap.
- Broken down into the components of pay, the median S&P 500 CEO salary grew 15 percent versus 10 percent for the FTSE 100; annual bonus increased 22 percent among S&P 500 CEO versus 21 percent for FTSE 100 CEOs; and LTI pay grew 34 percent for the S&P 500 while decreasing by 3 percent for the FTSE 100.
- Median vote support levels for say-on-pay proposals dropped by 1.8 percent in the UK and 1.7 percent in the U.S between filing years 2019 and 2023.
Stephan Stegmueller, Head of EMEA Advisory at ISS Corporate Solutions, said: “The drop in median vote support levels for say-on-pay proposals we found on both sides of the Atlantic suggests that, against a backdrop of consistent higher shareholder dissent levels, investors still have a greater threshold for higher overall pay in the U.S.”
Access the ICS analysis here.
About ISS Corporate Solutions
Companies turn to ISS Corporate Solutions, Inc. (“ICS”) for expertise in designing and managing corporate governance, executive compensation, cyber risk monitoring, and sustainability programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base by delivering best-in-class data, tools, and advisory services. Our global client base extends to companies located across North America, Europe, and Asia. ICS is a wholly owned subsidiary of Institutional Shareholder Services Inc. (“ISS”) and is headquartered in Rockville, Maryland. ISS’ Global Research Department, which is separate from ICS, will not give preferential treatment to, and is under no obligation to support, any proxy proposal of a company (whether or not that company has purchased products or services from ICS). Similarly, ISS’ responsible investment research and analytics teams will not provide preferential treatment to, and is under no obligation to provide a favorable rating, assessment and/or any other favorable result to any corporate issuer (whether or not that corporate issuer has purchased products or services from ICS). No statement from an employee of ICS should be construed as a guarantee that ISS will (a) recommend that is clients vote in favor of any particular proxy proposal nor (b) provide a favorable rating or other assessment of any corporate issuer. For more information, please visit www.isscorporatesolutions.com.