US Execs Pay Envelopes Shrink

January 22, 2002 ( - A sign that the US recession affects everyone, the nation's highest-paid executives got almost 5% less in their pay envelopes in 2001, according to a new study.

The new Executive Compensation Index, released by the Economic Research Institute (ERI) and, shows that executive compensation dropped by an average 4.6% last year.

That follows a hefty 15.7% jump between 1999 to 2000 and a healthy increase of nearly 20% each year from 1997 to 1999.

The study found that executive salaries are increasing at a slightly lower rate than revenue growth, a measurement that can be used to determine the executive’s value to the stockholders.

The highest paid executive during the survey period was John Welch at General Electric, with annual cash compensation of $16.7 million. Welch’s percentage increase was 9.2% more than the percentage increase in company revenues.

The Index tracks the total cash compensation, a figure that comprises salary and bonus, for the highest-paid executives at a cross section of 45 major US businesses.

The Index results are compiled by ERI/ each quarter and capture total cash compensation reported in the previous 12-month survey period.

Read more about the executive compensation survey at .