PRINCETON, N.J. and REDMOND, Wash. (Feb. 6, 2006)-The total cash compensation for the highest-paid executives in the U.S. finally has risen above pre-9/11 levels to a new high of $3.9 million, according to the February 2006 Chief Executive Total Cash Compensation Index released today by ERI Economic Research Institute and Career Journal.com, The Wall Street Journal´s executive career site. The previous total cash compensation record of $3.7 million was set in September 2001 (prior to 9/11.)
This reflects a 5.7% increase in total cash compensation over 2005 levels-relatively flat compared to the same period in 2004. The index tracks the total cash compensation (salary plus bonus) reported in the previous 12-month survey period for the highest-paid chief executive officers at a selected group of 45 major U.S. businesses.
For the highest-paid executives (based on companies reporting year to date) average base salary in the 2006 Index stood at $1,283,002, compared to 2005 base salary levels of $1,277,944-a 0.40% increase in base compensation over 2005. The highest-paid executives´ average annual cash bonus stood at $2.6 million based on companies reporting for the first period of 2006, compared to the 2005 annual cash bonus level of $2.4 million. This reflects an 8.6% increase in annual cash bonuses over 2005.
"The brightening economy has given companies more incentive to reward their executives," says Tony Lee, publisher, CareerJournal.com. "Retention is crucial for companies who want stability and growth."
"The 2006 Index reflects the continuing trend of company revenues increasing faster than total cash compensation for the highest-paid executives," says ERI Director Dr. David Thomsen.
Management pay continues to outpace rank-and-file total compensation advances of 2.8% annually, compared to a statistically friendly, minimum 3.8% rise in the cost of living over the same period.
The Total Cash Compensation Index reflects data submitted in 2004 for a randomly (among monthly reporting dates) selected group of 45 publicly traded companies among the 6,500 that report compensation data to the Securities and Exchange Commission. This average "comparables" group is from the population of publicly traded corporations, which in itself has been decreasing in size (after Sarbanes-Oxley.)
The Economic Research Institute (ERI)/CareerJournal.com Executive Cash Compensation Index and Report can be found at http://www.erieri.com/index.cfm?FuseAction=NewsRoom.Dsp_Release&PressReleaseID=113. Tthe supporting charts may be found at http://www.erieri.com/pdf/2006-executive-pay.xls and more information on executive salaries can be found at www.CareerJournal.com.
About CareerJournal.com
CareerJournal.com is The Wall Street Journal´s award-winning career site targeted to executives, managers and professionals.
About Dow Jones & Company
Dow Jones (NYSE: DJ; www.dowjones.com) publishes the global Wall Street Journal with its international and online editions; Barron´s; the Far Eastern Economic Review; Dow Jones Newswires and Indexes; MarketWatch; and Ottaway newspapers. Dow Jones co-owns Factiva with Reuters and SmartMoney with Hearst. Dow Jones also provides news content to CNBC and U.S. radio stations.
About ERI
ERI Economic Research Institute was founded in 1987 to provide research for private and public organizations in the form of published reports and software database products. ERI´s research database software subscriptions are now widely used, with over 7,000 corporate and consulting subscribers (affecting over 20,000 organizations´ pay practices, including most of the largest U.S. companies). ERI´s industry-leading Executive Compensation Assessor & Survey product was used in the calculation of the above index. The Executive Compensation Assessor is one of several products, services and training courses available to help corporate boards-both for-profit and non-profit-comply with federal and state regulations concerning executive compensation. For further information please go to www.eri-executive-compensation.com.
Contact:
Beth Brody, Brody PR Kathryn Kendall, CPA
(for CareerJournal.com) (for ERI)
609-397-3737 800-627-3697
bebrody[at]aol.com Kathryn.kendall[at]erieri.com