It’s deja vu all over again at the top. For the second year in a row, and the third time in four years, Greater Cincinnati public company CEOs collectively took a pay cut. This time CEOs’ compensation fell 2.8%, on average, about on par with 2022. But in 2021, CEOs got a hefty 22.8% pay raise.
Overall, the Courier’s analysis found companies are tying more CEO pay to performance these days. Local public companies linked 78% of CEO compensation to incentive-based pay or stock and option awards. Stock awards comprised 45% of total compensation. Salary made up just under 14% of local CEO compensation.
Much of the move toward compensation linked to company performance can be attributed to companies such as Institutional Shareholder Services that advise investors on how to vote their shares. ISS wants to see half of equity awards being based on performance.
Tim Dupuis, a principal at executive compensation and leadership consultancy Pearl Meyer, agrees companies are clearly doing a better job of linking pay to performance.
“In the last five to ten years, at almost all of my client companies, we’re constantly talking about pay for performance,” Dupuis said.