The top 10 executives on Billboard's annual ranking received an average of just 10% of their pay from base salaries—on the low side for the corporate world.
“By and large, base salary constitutes about 10 to 20 percent of average executive compensation,” says Aalap Shah, managing director at Pearl Meyer, an executive compensation and leadership consultancy.
Instead of receiving a large, guaranteed salary, top executives at public companies are increasingly paid based on their performances on metrics such as revenue growth, adjusted EBITDA growth, and share price gains.
“The view is that there should be more accountability and more performance orientation to executive compensation,” says Shah.