The median compensation for Minnesota’s top-paid CEOs has once again topped the $1 million mark.
Median total pay for the 100 top-paid chief executives in the state had dipped slightly or held steady in recent years. But last year it rose 26 percent to $1.2 million, the first time since 2007 that it exceeded $1 million.
A Minneapolis Star Tribune report (http://bit.ly/LWZo9B ) also said 71 of the CEOs got raises, with the median increase being 4.6 percent.
Don Lindner, an analyst who tracks executive compensation for WorldatWork based in Scottsdale, Ariz., noted that executive pay had fallen in previous years because companies weren’t meeting their goals during the recession. Now that some companies are improving, it’s not surprising that CEO pay is going up, he said.
“Things are working the way they ought to,” Lindner said.
But even if the executives are profiting, that doesn’t mean workers below them are seeing the same level of raises.
Average wage increases for salaried workers in the Midwest rose about 2.8 percent in 2011, compared with a 2.5 percent increase two years ago, according to WorldatWork.
“There are very few (employers) reporting average increases above 4.1 percent,” said the company, which also said employee raises in recent years were among the smallest the firm had seen in 37 years.
Robert Kennedy, who teaches ethics and business at the University of St. Thomas’ Opus School of Business, said new regulations have helped ensure that CEO pay is more aligned with company performance. But he said workers at many of those companies have seen their earnings erode.
“It’s not surprising, but a little disappointing, that pay for CEOs has gone up but not pay for regular employees,” Kennedy said. “I think that can’t continue forever. But it certainly is what we’ve seen in the last few years.”
The highest-paid CEO in the state remains Stephen Hemsley at UnitedHealth Group, with total compensation of $48 million last year. That followed paydays of $48.4 million in 2010 and $101.9 million the year before that. The outsized paychecks are driven by one-time gains from stock options he was granted 10 years ago, when boards were far more generous in bestowing stock options.
Among highlights from the newspaper’s analysis:
— The highest straight salary was drawn by Gregg Steinhafel, of Target Corp., at $1.5 million.
— The CEO with the lowest salary was Michael Reger, of Northern Oil & Gas Inc. His salary is zero, as his compensation is driven primarily through incentive stock grants.
— The largest bonus went to Ameriprise Financial CEO James Cracchiolo, who was awarded $11 million.
— The biggest gain from stock options was by Hemsley at UnitedHealth Group, with gains of $28.8 million.
The newspaper’s list of top 100 CEOs had four women in 2011, down from six the year before. The highest-ranked was Sally Smith, of Buffalo Wild Wings, who came in at No. 19 with total pay of $4.1 million. Smith, who was ranked No. 34 on last year’s list, is the first female CEO on the newspaper’s list to be in the top 20.
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Information from: Star Tribune, http://www.startribune.com
