A news release from the San Francisco compensation consulting firm said the trend is partially fueled by an average year-over-year revenue growth of 45% and a near tripling of net income at semiconductor companies.
The CEOs’ increase in annual incentive cash
compensation, however, was offset by an 11% drop in
annual stock-based compensation grants – netting a 6%
increase in CEO total direct compensation from the prior
year, according to the announcement.
“Given the dollar value and the relative piece of total direct compensation we are seeing, it is critical that compensation committees align bonus payouts with performance measures that drive short-term shareholder value and support the company’s long-term strategy,” said Brandon Cherry, a Principal at Presidio Pay Advisors, in the news release. “Where there is a disconnect between company performance and executive pay, shareholders’ return on investment in their executive management team should be reviewed.”
The report also indicated that total cash compensation for Chief Financial Officers was up 22% – creating “pay compression” across the top executive ranks. Historically, CEO pay is 80% to 85% higher than the next highest paid executive. This margin narrowed to under 50% in this year’s survey, according to the news release.
The survey presents findings on executive pay and ownership levels in 112 semiconductor and semiconductor equipment companies.