News - For Immediate Release

ERI Economic Research Institute created this index of Executive Compensation 11 years ago. Since its inception in 1997, revenues of the US companies studied increased nearly 7 times faster than the dollar amounts paid to the companies’ highest paid executives, with total revenues increasing by 118% compared to an 18% increase for executive compensation.

Compensation Changes during the Past 12 Months

During the past 12 months, Overall Total Compensation of the highest-paid executive decreased by 4%, while revenues increased nearly 7%, with the average top executive receiving Overall Total Compensation of $17,760,518.

The changes in the components of compensation during the most recent 12 months for the highest-paid executive are as follows:*

	November 2007	November 2008	Percent Change
Salary	$1,260,201	$1,260,001	-0.02%
Bonus & Nonequity Incentives	$3,478,973	$4,079,745	17.8%
Total RSA/Options	$9,162,516	$9,558,747	4.3%
RSA (restricted stock)	$4,109,675	$5,115,352	24.5%
Stock Options	$5,052,841	$4,443,395	-12.1%
Pension	$1,163,269	$1,692,908	45.5%
LTIP	$590,297
All Other	$ 2,842,521	$1,151,114	-59.5%
Total Overall Compensation	$18,497,780	$17,760,515	-4.0%
Company Revenues (Millions)	$58,194	$62,021	6.6%

*The new SEC 2007 Summary Compensation Table format has redefined component dollar categories, accounting for some of the variance shown above.

Compensation Changes Since 1997

The highest paid executives of US companies saw an increase in Overall Total Compensation of nearly 18% during the past 11 years, but the compensation components reported have changed significantly during this time period due to SEC reporting requirements.

Comparing Revenue growth to Total Compensation growth during this same period shows the average dollar amount of company revenues increased by nearly 118% as compared to 18% for total compensation. This means the dollar revenues increased nearly 7 times faster than the average dollar amount of the Executive Total Compensation Package.

Compensation Components in 1997 and 2008 are shown below:

Compensation Components	1997 Average Dollar Amount	2008 November Dollar Amount	Percent Change
Salary	$930,640	$1,260,001	35.4%
Bonus & Nonequity Incentives	$1,579,871	$4,097,745	159.4%
Total RSA/Options	$11,798,521	$9,558,747	-19.0%
Restricted Stock	$1,310,575	$5,115,352	290.3%
Stock Options	$10,487,946	$4,443,395	-57.6%
Pension		$1,692,908
LTIP	$441,749
All Other Compensation	$335,769	$1,151,114	242.8%
Total Compensation Package	$15,086,550	$17,760,518	17.7%
Company Revenues (Millions)	$28,547	$62,021	118.0%

The Components of Total Compensation for the highest paid executive have changed in relative importance during the past 11 years as shown below:

	1997*	2008
Salaries	16.5%	8.9%
Bonus	21.7%	4.5%
Incentives (non-equity)*		16.3%
Total RSA/Options	52.7%	56.1%
RSA (restricted stock)	10.2%	31.4%
Stock Options	42.5%	24.7%
Pension*		8.0%
LTIP	3.6%
All Other	5.4%	6.2%

* Non-equity Incentives and Pension were not part of the format of the 1997 Summary Compensation Tables.

The trend away from guaranteed base salary along with a shift from stock options to restricted stock awards has continued throughout the period of the study. “More corporate boards are tying compensation packages to performance through Incentive Plans, Stock Options, and Restricted Stock Awards. There has been a noticeable shift away from Stock Options to Restricted Stock Awards. Pension amounts were not part of the 1997 reporting requirements but are currently 8% of executive compensation. With the recent drop in the value of the stock market, it appears Pensions and Non-Equity based compensation components are accounting for a greater share of Total Compensation,” observed Dr. David Thomsen, Director, ERI Economic Research Institute.

The Compensation Indices reflect data from a representative group of 45 companies randomly selected from the approximately 6,500 companies that report compensation data to the Securities and Exchange Commission (SEC). The November 2008 index has been adjusted to reflect merger activity that has occurred since the inception of the index. ERI has tracked pay for the highest paid executive in this group of companies since 1997.

View November 2008 Total Executive Compensation Line Graph.

View November 2008 Total Executive Compensation Bar Graph.

View November 2008 Highest Paid Executive - Pay Components Graph.

View November 2008 Highest Paid Executive Dollar Components Pie Chart.

View November 2008 Highest Paid Executive Compensation Components Pie Chart.

View Highest Paid Executive Compensation Components from 1997 to Present.

View 1997 Highest Paid Executive Compensation Components Pie Chart.

ERI Economic Research Institute is a leader in compensation and performance metric information. Based in Redmond, Washington, ERI provides salary survey and cost-of-living research reports and software to over 15,000 organizations worldwide. With information gathered from online surveys and an extensive survey library, ERI provides subscribers with assessments on salary, relocation, the cost of living, and executive compensation. ERI's pay data covers the United States, Canada, and the EU. Its industry-leading Executive Compensation Assessor® & Surveysoftware reports executive cash compensation based on information from private executive pay surveys, as well as publicly reported information for 6,500 US, 1,150 Canadian, and 2,300 UK and EU organizations. For analysis of executive pay in tax-exempt organizations, see ERI’s Nonprofit Comparables Assessor™ & Tax-Exempt Survey software, which utilizes the ERI database of 28,000,000 measures from over 525,000 organizations. Both the IRS National Appeals and Tax Exempt Entities Divisions use these two Assessor Series® products in their reviews of reasonable and unreasonable compensation. Visit www.erieri.com to learn more about ERI and to review its other talent management and compensation indices.

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