May 19, 2020

CEO pay drops in 2009

Bloomberg Report
Executive Compensation
Bizclik Editor
2 min
CEO pay drops in 2009
In the debut issue of Business Review USA, we did a feature article on executive compensation. The article profiled a few non-profits whose aim was to decrease and regulate executive compensation. For 2009, firms like The Conference Board and The Center of Executive Compensation have a reason to smile, and a reason to frown, with the recently released numbers from Bloomberg BusinessWeek on executive compensation.

According to the statistics and surveying from Bloomberg BusinessWeek on exectuive compensation, CEO pay fell 8.6 percent in 2009. That's the good news. However, the data shows the cash portion of their comepnsation rose 8.3 percent. What this means is companies are giving out less long term incentives for CEOs and compensating with more, certain cash payouts.

"When the economy is reeling, the most stable form of pay isn't stocks, it's cash. In rough times, the surest thing is cash, and that's what they went for," said Sam Pizzigati, an associate fellow at the Institute for Policy Studies in Washington. 

Of the firms surveyed, the ones that cut salary the most were the financial companies. The companies that sit atop the 20 financial firms represented of 37 percent of the total drop of CEOs in 2010. 11 of these companies were banks that received funds in the Troubled Assets Relief Program, which had a federal guideline restricting CEO compensation.

Other executives, like David Cote from New Jersey-based Honeywell International Inc., made a personal requiest to not receive any bonus compensation. His total pay was slashed 57 percent. 

For more on this story, check out the complete report

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