Complicating the Calculation of CEO Pay

How much did Jeff Immelt earn last year? In General Electric’s annual proxy statement, the figure is $9.6 million, which seems modest by today’s standards for the chief executive officer of America’s eighth-largest company. On the same page, you’ll find a much higher tally: $37.2 million.

That’s his “total pay,” a figure that the Securities and Exchange Commission has required companies to report since 2006. It includes long-term compensation such as stock options and pensions and is presented as an effort to clarify a murky number. “Shareholders need intelligible disclosure that can be understood by a lay reader without the benefit of specialized expertise or the need for an advanced degree,” then-SEC Chairman Christopher Cox said when it was introduced.