How Much Do CEOs of Fortune 100 Companies Make?

The income gap remains a discussion topic - the current average CEO to median employee salary is about 200:1. In 2015, the Securities and Exchange Commission mandated that all publicly traded companies disclose their executive compensation. This means that companies need to include a summary table of the 5 highest paid executives as part of their annual Proxy statement (Form DEF 14A).

In this report, we analyzed the performance of the salary of Fortune 100 their CEOs and their company performance. The total salary of a CEO is broken down into seven categories: base salary, bonus, stock awards, option awards, non-equity incentives, pension value, and “other” compensations. In the pie chart below, we show an average composition of all salary data.



Base salary makes up only 8% of total compensation. The largest source of income is from stock awards, which represent nearly 50%.

Is the 200x multiple of median salary justified? Do companies do better when their CEO is paid more? One might argue that a higher salary drives better performance. We took the total pay of the Fortune 100 CEOs and compared it to the performance of the company, measured by annual revenue growth rate (as a % change from FY16 to FY17). With a correlation coefficient of 0.0691 (as shown in the chart below), we can see there is no clear relationship between how much a CEO takes home and how well the company performs.




It is also worth noting that Larry Page, CEO of Alphabet, took home a total salary of $1. The $1-Salary-Club also include Oracle CEO, Larry Ellison, and Facebook CEO, Mark Zuckerberg. As these Founder/CEOs possess large holdings of stock in the company, such compensation signifies their pledge to bear full responsibility for the well-being of the company.

The table below shows the complete list of Fortune 100 company revenue with annual growth and their CEO compensation. 



Key takeaways: 

  • A majority of (46%) of CEO compensation comes from stock awards, which is directly correlated with the performance of the company.
  • There is no strong correlation between how well the company performs (measured as annual growth in revenue) and how much the CEO gets paid


Sources:

News articles, company announcements, social media, and Craft analysis

About Craft:

Craft is a machine-learning powered data and analytics platform building the ‘Source of Truth’ on companies, and mapping the global economy. We organize data from thousands of sources to provide comprehensive, up-to-date sector and company profiles, ranging from early-stage to the largest companies in the world.

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Alphabet
HQ
Mountain View, US
Employees
123,048↑ 4% increase

Alphabet is a holding company of Google and several Google-related initiatives.

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Facebook
HQ
Menlo Park, US
Employees
44,942↑ 5% increase

Facebook is a company providing an online social networking service.

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Oracle
HQ
Redwood City, US
Employees
136,000

Oracle is a company providing integrated cloud applications and platform services.

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Amazon
HQ
Seattle, US
Employees
840,400↑ 6% increase

Amazon is a company operating a marketplace for consumers, sellers, and content creators.

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Berkshire Hathaway
HQ
Omaha, US
Employees
391,500

Berkshire Hathaway is a diversified holding company owning subsidiaries engaged in insurance, freight rail transportation, utility and energy, and manufacturing, service, and retailing businesses.

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Cisco
HQ
San Jose, US
Employees
75,900↑ 3% increase

Cisco is a global company that designs and sells a broad range of technologies across networking, security, collaboration, applications, and the cloud.

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Exxon Mobil
HQ
Irving, US
Employees
74,900↑ 6% increase

Exxon Mobil is a company that explores and produces crude oil and natural gas.

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Prudential
HQ
London, GB
Employees
21,877↓ 5% decrease

Prudential is an international financial services group and life and pensions provider.

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The Walt Disney Company
HQ
Burbank, US
Employees
223,000↑ 11% increase

The Walt Disney Company is a media and entertainment enterprise comprising of studios, parks, products and media networks.

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