Trends in CEO Compensation and Equity Holdings for S&P 1,500 Firms: 1994-2007
Journal of Applied Finance, Forthcoming
38 Pages Posted: 14 Nov 2009
Date Written: November 9, 2009
We analyze CEO pay and equity holdings for the S&P 1,500 and broad industry classes. Between 1994 and 2000 real annual compensation doubled, and there was a dramatic shift from salary to option grants. The value and proportion of CEO equity holdings and the price-performance-sensitivity of their portfolios also increased, but, managers held less shares and more options. After the crash of the dot.com bubble at the turn-of-the-century pay fell briefly. But, it then began to trend upward again through 2007. Since 2001 option grants have declined notably, replaced largely by restricted stock grants. In the most recent years CEO option holdings and the price-performance-sensitivity of their equity portfolios have declined to levels far below those in 1994.
Keywords: CEO Compensation, Equity Holding, Price-Performance-Sensitivity, Industry Analysis
JEL Classification: J33, G30, M40
Suggested Citation: Suggested Citation