Median US CEO Pay Hits Record ₹143 Cr Over Stock Awards: Study
The latest study on CEO pay has revealed a shocking trend – the median pay among top US CEOs has reached a record high of ₹143.35 crore (approximately $20 million) for 2024. This significant increase is largely attributed to the massive stock grants that CEOs received, which boosted their reported earnings.
The study, conducted by ISS-Corporate, a leading corporate governance research firm, analyzed the pay of CEOs at S&P 500 companies. According to the review, the median pay for US CEOs has risen by 7.5% from the previous year, marking a new record high.
The soaring stock awards have been a major contributor to the increased pay for CEOs. Many companies have been issuing large stock grants to their CEOs, which have significantly impacted their reported earnings. This trend is not limited to a few companies, but is widespread across the S&P 500 index.
Axon, a leading provider of law enforcement technology, and Union Pacific, a major railroad company, were among the companies that saw significant pay boosts from stock awards. According to the study, Axon’s CEO, Rick Smith, received a total compensation package worth ₹356 crore (approximately $50 million) in 2024, with a significant portion of it coming from stock awards. Similarly, Union Pacific’s CEO, Lance Fritz, received a total compensation package worth ₹275 crore (approximately $39 million) in 2024, with a significant portion of it coming from stock awards.
The study also found that the gap between CEO pay and employee pay has widened significantly. In 2024, the median CEO pay was 142 times higher than the median employee pay, up from 130 times in 2023. This widening gap has raised concerns about income inequality and the fairness of CEO compensation.
The study’s findings have sparked controversy and debate among corporate governance experts, investors, and employees. Many argue that CEO compensation is excessive and unfair, while others argue that it is a necessary incentive to attract and retain top talent.
“This study highlights the need for greater transparency and accountability in CEO compensation,” said a corporate governance expert. “CEOs are not just employees, they are the leaders of companies that have a significant impact on society. Their compensation should reflect their performance and the interests of all stakeholders, not just shareholders.”
The study’s findings also raise questions about the effectiveness of corporate governance practices in the US. Many experts argue that the current system is flawed and in need of reform.
“The current system is broken,” said a shareholder activist. “CEOs are being rewarded for short-term gains, rather than long-term performance. This is not only unfair to employees and other stakeholders, but it also undermines the long-term success of companies.”
The study’s findings are a wake-up call for companies, investors, and regulators to re-examine the CEO compensation system. It is essential to strike a balance between CEO compensation and the interests of all stakeholders.
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