每日英语：What's a CEO Worth? More Firms Say $10 Million

Corporate directors kept CEO pay largely flat in 2012, for a second consecutive year.

But chief executives still took home more money last year, as the bull market swelled the value of prior stock-based pay, including some particularly profitable awards made during the financial crisis, when stock prices were weak.

The findings emerged from an analysis of annual proxy statements by consulting firm Hay Group and The Wall Street Journal, and highlight the challenges of measuring executive pay.

Compensation awarded to CEOs of 300 U.S. companies rose a median 3.6% to $10.1 million, the analysis found. The total includes salary and annual bonuses, plus the value of restricted stock and stock options at the time they were granted. The companies surveyed, all of them public, with revenue exceeding $7.5 billion, were the largest to file proxy statements between May 1, 2012 and April 30, 2013. One company, Whole Foods Market Inc., WFM +0.66% had co-CEOs.

Last year's relatively modest increase in CEO compensation followed a 2.3% bump in 2011. Still, the typical big-company chief got a larger raise than most Americans. The average weekly paycheck for a private-sector worker grew 2.3% last year, according to the Labor Department.

CEO pay increased slightly faster than profit, which rose 2.1% at the companies surveyed. But it lagged behind the median 14% increase in total shareholder return for those companies, which includes share-price movement and dividends.

The results suggest that decades of steady increases in CEO pay may be tapering off. For three consecutive years, the typical compensation package for a big-company CEO has remained remarkably similar: salary of $1.1 million, annual bonus of roughly $2 million, and equity grants valued at approximately $7 million.

'There is a level of conservatism around pay,' said Irv Becker, Hay Group's national practice leader for executive compensation. 'It has leveled off, and I don't see it taking off' soon, he added.

Mr. Becker and other analysts said the relative stability reflects the growing influence of investors, who can cast a nonbinding vote on executive compensation annually at most companies. Few companies fail to win majority support in these so-called say-on-pay votes, but 'no' votes of 20% or more are considered embarrassing, and often portend trouble for directors and executives.

Say-on-pay votes also may be inspiring more consistency in pay deals, as directors seek to win favor with investors and their advisers, including Institutional Shareholder Services Inc. and Glass, Lewis & Co.

The Journal analysis found more companies are paying their CEOs close to the median $10 million, and fewer are straying far from that number. In 2012, 127 of the 301 CEOs received compensation valued at between $7.5 million and $12.5 million, compared with 107 in that range in 2011. The numbers receiving less than $7.5 million, and more than $12.5 million, fell.

'There is a growing conformity in executive compensation,' said Doug Friske, global head of executive pay at human-resources consulting firm Towers Watson TW +1.02% . 'Companies want to be in line with accepted norms, and don't want to run afoul of proxy advisers or shareholders.'

The stability and conformity mask shifts in how CEOs are paid. For the first time in the Journal's annual surveys, the largest slice of CEO pay came from restricted stock linked to a company's financial or stock performance. Such grants accounted for 27.4% of compensation for the 301 CEOs, up from 22.6% a year earlier. Including annual bonuses and performance-linked cash grants, performance-based pay rose to 54% of CEO compensation from 52% in 2011.

Companies are adopting 'much more shareholder-friendly pay programs than several years ago,' said David Wise, a Hay Group vice president.

With more pay tied to performance, the Journal analysis also found a stronger statistical link between a CEO's pay and a company's profits and stock price. At companies where 2012 profit grew faster than average, CEO pay rose 8%; at companies where it fell, CEO pay declined 1%.

The top earner in the survey was Oracle Corp. ORCL +0.94% Chief Executive Larry Ellison, who received compensation of $94.6 million for the fiscal year ended May 31, 2012. The vast majority of Mr. Ellison's compensation came from seven million stock options, valued at $90.7 million; Mr. Ellison can't exercise some of the options until 2015.

Mr. Ellison, who holds Oracle stock valued at roughly $38 billion, was the second-highest-paid executive in the Journal's survey in each of the previous three years. He rose to the top spot in a year in which the business-software maker's net income rose 17%, but its stock price fell. Oracle shares have since rebounded, rising 30% since the end of its last fiscal year.

An Oracle spokeswoman declined to comment. In its proxy, Oracle said Mr. Ellison and other executives may earn significantly more than peers, but only if Oracle's profit and share price increase.

Three of the five highest-paid executives run media and entertainment companies that delivered strong shareholder returns last year. Leslie Moonves of CBS Corp. CBS +0.74% ranked second, with compensation of $58.8 million, including bonuses of cash and stock totaling $30 million and stock options valued at $16.3 million. Mr. Moonves's compensation fell 15%, though CBS's net income increased 21%; its shares have risen more than 14-fold since early 2009.

A CBS spokesman declined to comment. In its proxy, CBS lauded Mr. Moonves for the network's industry-leading ratings and for securing broader distribution of CBS programming.

Robert Iger of Walt Disney Co. DIS +0.30% ranked third, with compensation of $36.3 million in the fiscal year ended Sept. 29, 2012, including a bonus of $16.5 million, stock options valued at $7.8 million and performance-based restricted stock valued at $9.5 million. Disney's net income rose 18% in its fiscal 2012, and its shares soared 75%.

'Disney's executive compensation is based on performance, and the company has delivered spectacular results during Mr. Iger's 7½-year tenure,' a company spokeswoman said.

Philippe Dauman of Viacom Inc., VIAB +1.34% ranked fifth, with compensation of $33.1 million, down 23% from a year earlier, as the film and television company's net income fell 7.3%. Mr. Dauman's compensation included $12.1 million in performance-based restricted stock, and an $11.5 million bonus.

Viacom declined to comment. In its proxy, Viacom cited robust 2012 shareholder returns and praised Mr. Dauman for new affiliation agreements and strengthened international distribution.

The fourth-highest-paid CEO was Mark Parker of Nike Inc. NKE -0.12% His $33.9 million pay package included $20 million in restricted stock that Mr. Parker can't sell until 2017. Nike's net income rose 4% and it delivered a 30% shareholder return for the year ended May 31.

A Nike spokeswoman said most of Mr. Parker's pay is tied to Nike's results, and his restricted stock 'should be viewed as compensation over the five-year period' of his restricted stock grant.

While the pay awarded to CEOs rose only slightly last year, it was far outpaced by the compensation they realized from previously granted stock and stock options, which rose a median 21%. Realized compensation includes salary, annual bonuses and the value of restricted stock that vested and stock options that were exercised during the year. It excludes the value of any new grants of stock or options.

Nearly half of the CEOs in the survey─149─exercised stock options in 2012, up from 112 in the similar group in 2011; the median value of the options rose 63% to $5.8 million from $3.6 million. For more than three-fourths of the CEOs─238─restrictions lapsed on previously granted shares; the median value of those shares rose 26% to $4.4 million from $3.5 million.

The biggest realized gain was an unusual case. Kinder Morgan Inc. KMI +0.55% Chairman and CEO Richard Kinder realized $1.1 billion when about 31.6 million shares he received in connection with the pipeline company's being taken private in 2006 converted into another type of share. A Kinder Morgan spokesman said the shares converted after certain financial performance metrics were met, and came from other investors in the buyout, not public shareholders. Mr. Kinder hasn't sold any of those shares.

As of March 15, Mr. Kinder owned more than 240 million Kinder Morgan shares, valued today at roughly $9.6 billion. The spokesman said Mr. Kinder has received a $1 annual salary since KMI was taken public in 1999 and has never received a bonus, stock options or restricted stock.

Tim Cook of Apple Inc. AAPL -3.38% realized the second-largest gain, after restrictions lapsed on 237,500 Apple shares, valued at $139.7 million. The shares had been granted to him in 2008 and 2010, when he was Apple's chief operating officer. Mr. Cook sold roughly 20,000 of the shares, and used another 17,000 to pay taxes. He still holds one million restricted shares, initially valued at $376 million, granted to him in 2011, when he became CEO following the death of Steve Jobs.

An Apple spokesman declined to comment.

Some of 2012's big payouts came from stock and options granted in late 2008 and early 2009, when stocks plunged during the financial crisis. In March 2012, Starbucks Corp. SBUX +0.87% CEO Howard Schultz exercised 635,000 options granted in November 2008, when Starbucks shares traded for $8.64. When he exercised the options and sold the shares, Starbucks stock was close to $53, generating a $28 million gain. Mr. Schultz also exercised 2.1 million options granted in 2002 and 2003, reaping gains of more than $65 million when he sold those shares.

A Starbucks spokesman said Mr. Schultz's pay is linked to the company's performance and reflects 'the unique value of his contributions to Starbucks.' The spokesman said Starbucks last year posted record profits and its stock is at an all-time high.