Compensation levels rise for US SmallCap CEOs

Median total compensation levels for chief executive officers (CEOs) in the US SmallCap 600 increased by 4.6% from 2011 to 2012, according to research by US-based executive remuneration data provider Equilar.

Its 2013 S&P SmallCap 600 CEO pay strategies report provides a broad-based compensation analysis of 395 CEOs within the SmallCap, an index of small market capitalisation companies, found that median total compensation was approximately $2.5 million (£1.62 million) in 2012, up from $2.4 million (£1.56) in 2011.

The research found that these results are on par with the growth seen in the MidCap and LargeCap indices, where pay rose by 5.7% and 6.5%, respectively.

Options, salary and bonuses decreased as overall components of total compensation, while share components increased. This increase means that share awards now represent a 36.9% component of compensation for SmallCap CEOs, which mirrors a trend seen within the pay mix structure for S&P LargeCap CEOs, with the stock award component representing 44% of pay.

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The research also found:

  • Median total bonus payouts for SmallCap CEOs remained unchanged at $500,000 in 2012 and 2011.
  • 24% of CEOs received a discretionary bonus in 2012, compared to 23.0% in 2011.
  • Restricted stock displayed the largest gain in prevalence during 2012, rising to 69% from 65%.
  • Performance shares also increased in prevalence, up from 40% in 2011 to 43% in 2012.
  • The prevalence of option awards shrunk to 41%, down from 45% in 2011.
  • An area that saw a large decline in prevalence in 2012 was the granting of options only, shrinking by 39% from 2011’s prevalence.
  • Another notable decrease was the granting of options with performance shares, down by 17% in 2012.
  • The number of CEOs not receiving any equity vehicles increased by 9% from 2011 to 2012.

In terms of industries, the research found:

  • Industrial goods CEOs received the highest compensation, with a median total pay of $3.3 million (£2.14 million) in 2012.
  • Median total CEO compensation within the financial services and the consumer goods industries saw the largest growth from 2011 to 2012, increasing by 20% and 14%, respectively.
  • Within both the MidCap and LargeCap indices, CEOs in the healthcare sector received the highest total pay, at $6.1 million (£3.96 million) and $11.1 million (£7.2 million), respectively.
  • The basic materials and financial services industries saw the largest compensation growth within the MidCap index, both rising by 13%.