Trends in CEO Compensation and Equity Holdings for S&P 1500 Firms: 1994-2007

Lord, Richard A.; Saito, Yoshie
September 2010
Journal of Applied Finance;2010, Vol. 20 Issue 2, p40
Academic Journal
We analyze CEO pay and equity holdings for the S&P 1,500 and broad industry classes. Between 1994 and 2000, real annual compensation doubled, and there was a dramatic shift from salary to option grants. The value and proportion of CEO equity holdings and the price-performance-sensitivity of their portfolios also increased, but, managers hem less shares and more options. After the crash of the dot.com bubble at the turn-of-the-century pay fell briefly. But, it then began to trend upward again through 2007. Since 2001 option grants have declined notably, replaced largely by restricted stock grants. In the most recent years CEO option holdings and the price-performance-sensitivity of their equity portfolios have declined to levels far below those in 1994.


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