Since 2000, executive pay raises have fallen dramatically, with an average
increase of just 2.1% last year, followed by a 1.5% increase in the first
quarter of 2002, and a 1.9% decrease in the second quarter of 2002. The highest
paid exec for the most recent survey period was Steven Jobs, CEO, Apple
Computer. He received no salary but was given a $43,511,534 bonus.
In spite of the decrease in total executive compensation in the most recent
quarter, executives did not see their compensation fall as rapidly as company
revenues, which fell 2.1% in the second quarter.
The Index, instituted in 1997, tracks the total cash compensation (salary +
bonus) for the highest-paid executives at a cross section of 45 major U.S.
businesses. It also examines whether or not executive compensation is increasing
or decreasing faster than company annual revenues. This measurement can be used
to determine the executive’s value to the stockholders.
“These findings are consistent with the negative employment outlook," explains
Tony Lee, editor in chief of CareerJournal.com, The Wall Street Journal’s
executive career site. “The highest paid executives are not faring any better
than middle or lower management."
“Until the economy starts to improve, we don’t foresee an increase in overall
executive pay," says Dr. David Thomsen, Director, ERI Economic Research
Institute. “Rising company revenues and increases in executive compensation will
be signs of an economic recovery."
The Index results are compiled by ERI/CareerJournal.com each quarter and capture
total cash compensation reported in the previous 12-month survey period. The
index (1997 = 100) stood at 167.6 on January 1, 2002 compared to 166.8 for
August 2, 2002.
The entire Economic Research Institute (ERI)/CareerJournal.com Executive Cash
Compensation Index and Report can be found on ERI’s site by clicking here
The Wall Street Journal’s CareerJournal.com (www.CareerJournal.com
) is the
premier career site targeted to executives and professionals. Featuring more
than 30,000 top-level jobs and 2,500 articles on all aspects of job hunting and
career management, the site attracts over 500,000 unique visitors monthly.
CareerJournal.com features salary data, negotiating tips, popular columns from
The Wall Street Journal, and exclusive content from its own dedicated news
staff. The site was recently awarded a gold star and named Best Executive Career
Site by Yahoo! Internet Life magazine, was named “Editor’s Choice" as best
executive job site by PC Magazine, received a Best of the Web award from Forbes
magazine and was selected Best Site by CareerXRoads in their 2002 Directory.
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 6,000 corporate and consulting subscribers (affecting over
20,000 organizations’ pay practices, including most of the largest U.S.
companies). Subscribers include corporate compensation, relocation, human
resources, and other professionals as well as independent consultants and
counselors, and U.S. and Canadian public sector (including military, law
enforcement, city/county, state/provincial, and federal government pay
administrators). ERI also offers online learning through its Distance Learning
. ERI’s industry-leading Executive Compensation Assessor
product was used in the calculation of the above index.