Median CEO pay rises to $9.7 million in 2012

CEO pay has been going in one direction for the past three years: up.

The head of a typical large public company made $9.7 million in 2012, a 6.5 percent increase from a year earlier that was aided by a rising stock market, according to an analysis by The Associated Press using data from Equilar, an executive pay research firm.

CEO pay, which fell two years straight during the Great Recession but rose 24 percent in 2010 and 6 percent in 2011, has never been higher.

Companies say they need to pay CEOs well so they can attract the best talent, and that this is ultimately in the interest of shareholders. But shareholder activists and some corporate governance experts say many CEOs are being paid far above what is reasonable or what their performance merits.

Pay for all U.S. workers rose 1.1 percent in 2010, 1.2 percent in 2011 and 1.6 percent last year - not enough to keep up with inflation. The median wage in the U.S. was about $39,900 in 2012, according to data from the Bureau of Labor Statistics.

After years of pressure from corporate governance activists unhappy about big payouts, many companies have revamped their compensation formulas. They have awarded a bigger chunk of compensation in stock to align pay more closely to performance, become more transparent about how compensation decisions are made and in some cases promised to claw back pay from fired executives.

Shareholder activists say the changes are a step in the right direction, yet they argue that CEO pay remains too high and that there is still too much incentive to focus on short-term results.

The highest paid CEO was Leslie Moonves of CBS, who made $60.3 million. He beat the second-place finisher handily: David Zaslav of Discovery Communications, who made $49.9 million. Five of the 10 highest-paid CEOs were from the entertainment and media industry.

For the fourth year in five, health care CEOs received the highest median pay at $11.1 million, while utility CEOs had the lowest at $7.5 million. The median value is the midpoint; half the CEOs in that group made more and half less.

The median pay for women CEOs was higher than it was for men - $11.2 million compared with $9.6 million - although only 3 percent of the companies analyzed were run by women. Irene Rosenfeld of Mondelez International, the snack giant that was spun off from Kraft Foods last year, was the highest-paid female CEO, taking in $22 million.

The biggest changes in compensation last year came from stock, which increased 17.2 percent, and from stock options, which declined by 16 percent.

Over the past five years, the amount of compensation that comes from stock has risen from 31.7 percent to 44.3 percent, while the amount from stock options has fallen from 31.9 percent to 17.6 percent.

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