A Look at Executive Compensation

(Originally published here.)

Big corporate executives get big money. How much depends on their industry.

Our own Bloomberg Industries has granular data on the compensation that top execs haul in as supervisors of Russell 1000 companies.

This first chart shows how many millions of dollars in annual comp the top five execs take home at a typical company in each of these industries.

Median 2012 executive compensation for the top five executives in nine industries.  Graphic: Bloomberg Visual Data; Source: Bloomberg Industries

Median 2012 executive compensation for the top five executives in nine industries. Graphic: Bloomberg Visual Data; Source: Bloomberg Industries

These pay packets have all grown since 2007, which is more than many Americans can say.

Are these execs delivering returns to shareholders that merit these pay raises? (Not that that’s the only way to gauge their performance, but we’re picking that one.)

There are lots of ways to measure how well execs have done for shareholders over time, but the most straightforward looks at how much you would have earned from buying stock and reinvesting all dividends.

Look here:

Comparison of median executive compensation to total return by Russell 1000 industry sector 2007-2012. Graphic: Bloomberg Visual Data; Source: Bloomberg Industries

Comparison of median executive compensation to total return by Russell 1000 industry sector 2007-2012. Graphic: Bloomberg Visual Data; Source: Bloomberg Industries

Yikes! Since 2007, only health-care, consumer discretionary and technology execs have delivered shareholder returns in sync with the growth in their compensation — and consumer-staples execs should probably ask for a raise.

Ummm, financial services? Durables? Utilities? Energy? Dear investors: Are you screaming?

(Matthew C. Klein is a writer for Bloomberg View. Follow him on Twitter.)

Advertisements

About Matthew C. Klein

I write about the economy and financial markets for Bloomberg View. Before that I wrote for The Economist on a fellowship provided by the Marjorie Deane Financial Journalism Foundation. I have worked at the world's largest hedge fund and read every FOMC transcript since May, 1987.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s