Strategies linking CEO pay to performance having an impact

Canadian CEO compensation up 10 per cent, according to new Watson Wyatt Canadian study

With continued pressure for improved corporate governance, many boards of directors in Canada are becoming more assertive in linking executive compensation to company financial performance. According to the annual Watson Wyatt S&P/TSX CEO Pay study, those efforts are paying off.

The 214 companies listed on the S&P/TSX Composite Index delivered a median total return to shareholders (TRS) of 25.9 per cent in 2003, the most recent period for which complete data is available. In contrast, base salary for CEOs of those same companies increased by a median of only 4.0 per cent over the previous year - a modest gain by historical standards - while median total cash compensation (base salary + bonus) increased 9.0 per cent and median total direct compensation (base salary + actual bonus paid + present value of long-term incentives) increased 10.0 per cent.

See full Article.