Compensation for both U.S. chief executives and outside directors of U.S. boards rose in 2003, according to a survey by The Conference Board.
Median total compensation for U.S. CEOs in 2003 (the latest year for which data is available) was higher in all industries covered in an annual study by The Conference Board based on data from 2,986 U.S. companies.
"There was generally good profit performance in 2003," says Charles Peck, The Conference Board's compensation specialist and author of the report. "As a result, annual bonus plans, which are based on profitability, paid off well in many cases."
Stock option grants, which decreased in size in 2002, decreased further in 2003, while restricted stock grants were larger than in prior years, indicating a shift in company practices regarding long-term incentives.
Total CEO compensation (salary, bonus and long-term compensation) was highest in the construction industry, at $2,968,000, and lowest in transportation, at $988,000. Total current compensation (salary plus bonus) was also highest in construction, at $2,445,000, and lowest in transportation, at $646,000. Communications paid the highest median salary, $648,000. The lowest was telecommunications, which paid $405,000.
Meanwhile, median total compensation for outside directors (all fees, retainers, committee pay, and annual, one-time or periodic grants of stock, restricted stock grants, and the value of stock option grants) was higher than last year's median in all three industry sectors. In manufacturing, median total compensation for outside directors rose to $72,750 this year, up from $69,620 in 2003. The financial sector increased from $55,000 to $67,000, while services rose to $70,000, up from $60,000.
Median basic annual compensation (the mix of fees and retainers for board service plus committee pay) was also up in all three industry sectors. Manufacturing increased from $45,000 to $50,000; financial services increased very slightly from $43,000 to $43,750; and services from $40,000 to $50,000, The Conference Board reported.
