The highest paid executives saw a 1.9 percent decrease in their total compensation in the second quarter of 2002, according to the most recent Executive Compensation Index released by the Economic Research Institute (ERI) and CareerJournal.com.
This is in sharp contrast to the 15.7 percent increase in total compensation executives received two years ago. Since 2000, executive pay raises have fallen dramatically, with an average increase of just 2.1 percent last year, followed by a 1.5 percent increase in the first quarter of 2002, and a 1.9 percent 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 percent 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."
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