A Watson Wyatt press release said the study found that the total value of CEO stock ownership and outstanding equity awards and bonus payouts for CEOs decreased by 42% in 2008, more than the 34% decline experienced by a typical shareholder at those companies. In aggregate, the CEOs analyzed in the study lost a combined $53.7 billion – roughly $55 million for the average CEO – in 2008, compared with $3.2 trillion for shareholders of the same set of companies.
The value of broad-based employee stock option grants declined by 17% in 2008. Realized gains from employee stock option exercises declined by an average 55% last year, from $54 million per company to $24 million.The estimated in-the-money value of employee stock options outstanding declined by approximately $100 billion for the companies in the study.
The Watson Wyatt survey also found that compensation committees continue to structure CEO pay programs so companies with better performance deliver higher realizable pay to their CEOs than low-performing companies. The median CEO at high-performing companies has a three-year aggregate realizable long-term incentive value that is 150% larger than at low-performing companies – $2.3 million versus $0.9 million in 2008.
Watson Wyatt’s “2009/2010 Report on Executive Pay: Moving Beyond the Financial Crisis” is based on public data from 982 companies in the S&P Super 1500 that filed proxies before July 2009.