US chief executives paid twice as much as their counterparts in UK

Chief executives in the US only got a modest pay rise last year, but their salaries are still double what a UK boss can expect to earn, latest figures show.

The 2005 CEO Compensation Survey by the Mercer HR consultancy found that the median US chief executive’s base salary remained flat at $975,000 (£557,320).

But when total direct earnings are counted, including base salary, annual bonus, and the present value of long-term incentives, US chief executives pull in $6.8m, a rise of 5%.

The most profitable field to be in is telecommunications, with total compensation reaching almost $19m.

Stephen Cahill, head of executive compensation in Europe at Mercer, said UK chief executives tended to earn much less, partly because shareholders in the UK had a greater influence on executive compensation.

“UK shareholders are more cynical than those in the US about what drives company performance,” he said. “There is less willingness here to accept that a CEO is wholly responsible for an organisation’s strong financial or share-based performance.”

Peter Chingos, a senior executive compensation consultant with Mercer in New York, said that a new culture of pay-for-performance was increasingly prevalent in US companies.

“The close alignment of pay and performance numbers indicates that organisations are moving towards more responsible executive compensation,” he said.


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