Chief Executive magazine recently completed its annual survey of CEO and senior executive compensation in private companies, based on responses from 1,100 private companies.
Here are some of the research highlights:• The median private company CEO compensation package totaled $362,900 in 2011.
To put this number in perspective, it is just 3.8% of the $9.6 million median compensation package given to S&P 500 CEOs in 2011.
• Median total compensation for private company CEOs increased only 1.9% from 2010’s $356,133.
• A whopping 80.4% of private company CEOs received a bonus in 2011.
• The next most highly compensated positions in private companies by median after the CEO are, in order, President, Chief Operations Officer and Chief Financial Officer.
The survey found that CEO and senior executive compensation is very highly correlated with company size, both in terms of company revenue and number of employees. But compensation is also strongly correlated with company performance in terms of revenue growth and profitability.
Most private companies are not following best practices to align senior executive pay with company performance, the survey reports. Private companies with institutional investors are more likely to create incentive-based executive compensation plans than sole proprietorships, partnerships or family businesses.
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