NEW YORK — They’re the $10 million men and women.
Propelled by a soaring stock market, the median pay package for a CEO rose above eight figures for the first time last year. The head of a Standard & Poor’s 500 company earned a record $10.5 million, a boost of 8.8 percent from $9.6 million in 2012, according to an Associated Press/Equilar pay study.
Last year was the fourth straight that CEO compensation rose after a decline during the Great Recession. The median CEO pay package climbed more than 50 percent over that stretch. A chief executive now makes about 257 times the average worker’s salary, up sharply from 181 times in 2009.
The best paid CEO last year led an oil-field-services company. The highest paid female CEO was Carol Meyrowitz of discount retail giant TJX, owner of TJ Maxx and Marshall’s. She got $20.7 million last year. And the head of Monster Beverage got a monster of a raise.
Over the last several years, companies’ boards of directors have tweaked executive compensation to answer critics’ calls for CEO pay to be more attuned to performance. They’ve cut back on stock options and cash bonuses, which were criticized for rewarding executives even when a company did poorly. Boards of directors have placed more emphasis on paying CEOs in stock instead of cash and stock options.
A boon for CEOs
The change became a boon for CEOs last year because of a surge in stocks that drove the S&P 500 index up 30 percent. The stock component of pay packages rose 17 percent to $4.5 million.
“Companies have been happy with their CEOs’ performance and the stock market has provided a big boost,” said Gary Hewitt, director of research at GMI Ratings, a corporate governance research firm. “But we are still dealing with a situation where CEO compensation has spun out of control and CEOs are being paid extraordinary levels for their work.”
The highest paid CEO was Anthony Petrello of oilfield-services company Nabors Industries, who made $68.3 million in 2013. Petrello’s pay ballooned with the $60 million lump sum the company paid him to buy out his old contract.
Nabors Industries did not respond to calls from The Associated Press seeking comment.
Petrello was one of a handful of chief executives who received a one-time boost in pay because boards of directors decided to renegotiate CEO contracts under pressure from shareholders. Freeport-McMoRan Copper & Gold CEO Richard Adkerson also received a one-time payment of $36.7 million to renegotiate his contract. His total pay, $55.3 million, made him the third-highest paid CEO last year.
The second-highest paid CEO among companies in the S&P 500 was Leslie Moonves of CBS. Moonves’ total compensation rose 9 percent to $65.6 million in 2013, a year when the company’s stock rose nearly 70 percent.
“CBS’s share appreciation was not only the highest among major media companies, it was near the top of the entire S&P 500,” CBS said in a statement. “Mr. Moonves’ compensation is reflective of his continued strong leadership.”
Media industry CEOs were, once again, paid handsomely. Viacom’s Philippe Dauman made $37.2 million while Walt Disney’s Robert Iger made $34.3 million. Time Warner CEO Jeffrey Bewkes earned $32.5 million.
The industry with the biggest pay bump was banking. The median pay of a Wall Street CEO rose by 22 percent last year, on top of a 22 percent increase the year before. BlackRock chief Larry Fink made the most, $22.9 million. Kenneth Chenault of American Express ranked second with earnings of $21.7 million.
Like stock compensation, performance cash bonuses jumped last year as a result of the surging stock market and higher profits.
More than two-thirds of CEOs at S&P 500 companies received a raise last year, according to the AP/Equilar study, because of the bigger profits and higher stock prices.
CEO pay remains a divisive issue in the U.S. Large investors and boards of directors contend they need to offer big pay packages to attract talented people.
Average weekly wages for U.S. workers rose 1.3 percent in 2013. At that rate, a person would have to work 257 years to make what a typical S&P 500 CEO makes in a year.
At a glance
•Female CEOs had a median pay package worth more than their male counterparts, $11.7 million versus $10.5 million for males. However, there were only 12 female CEOs in the AP/Equilar study compared with 325 male CEOs that were polled.
•The CEO who got the biggest bump in compensation from 2012 to 2013 was Rodney Sacks, CEO of Monster Beverage. Sacks earned $6.22 million last year, an increase of 679 percent. Monster’s board of directors awarded Sacks $5.3 million in stock options to supplement his $550,000 salary and $300,000 cash bonus.