Home Business Top Ten U.S. CEOs Earned $4.7 Billion In 2012

Top Ten U.S. CEOs Earned $4.7 Billion In 2012

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CEOs’ realized pay went up by 8.5 percent in 2012, with the top ten American CEOs raking in $4.7 billion, setting a new record. This unprecedented payout is largely because stock options that were negotiated when the market was depressed have grown in value, and total CEO pay is likely to increase even more after a year of particularly strong growth, reports Matt Krantz for USA Today.

Top Ten U.S. CEOs Earned $4.7 Billion In 2012

Even though CEO pay is up for the third straight year, it is facing pressure from the implementation of the Dodd-Frank Act, part of which is meant to pull back CEO compensation packages. There has also been growing movement from activist shareholders, Carl Icahn being one of the most prominent, to give shareholders more control over executive compensation.

The data, released by GMI Ratings, found that the five highest-paid CEOs in the country were: Mark Zuckerberg of Facebook Inc (NASDAQ:FB), who earned $2.3 billion; Richard Kinder of the energy firm Kinder Morgan Inc (NYSE:KMI) , who earned $1.1 billion; Mel Karmazin of Sirius XM Radio Inc (NASDAQ:SIRI), who earned $255 million; Gregory Maffei of Liberty Media, who earned $255 million; and Timothy Cook at Apple Inc. (NASDAQ:AAPL) who earned $144 million. It may seem strange to find Cook fifth in line when Apple Inc. (NASDAQ:AAPL) is one of the most profitable companies in the world with tons of cash on hand, but it’s the disconnect between corporate performance and CEO pay that has critics calling for reform. Zuckerberg’s enormous pay in 2012 is mostly a result of the company’s IPO. While he’ll certainly continue to be well-paid, his compensation will be in the tens or hundreds of millions instead of the billions in the future.

Pay of CEOs of big companies

CEOs of large companies saw a much bigger jump in pay than those of smaller firms, with the average increase in the S&P 500 nearing 20 percent, while CEO pay growth for companies in the S&P Smallcap index rose by just 7.8 percent. The SEC is already requiring companies to publish the CEO-to-average-worker pay ratio, and if CEOs do see a fourth straight year of double-digit growth in compensation, you can expect there to be renewed pressure from both shareholders and policymakers to bring more transparency to executive compensation packages.

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