A Look at Executive Compensation

Matthew C. Klein writes for Bloomberg View about the economy and financial markets. He previously wrote for the Economist magazine and its economics blog, Free Exchange.
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Big corporate executives get big money. How much depends on their industry.

Our own Bloomberg Industries has granular data on the compensation that top execs haul in as supervisors of Russell 1000 companies.

This first chart shows how many millions of dollars in annual comp the top five execs take home at a typical company in each of these industries.

Median 2012 executive compensation for the top five executives in nine industries. Graphic: Bloomberg Visual Data; Source: Bloomberg Industries

These pay packets have all grown since 2007, which is more than many Americans can say.

Are these execs delivering returns to shareholders that merit these pay raises? (Not that that's the only way to gauge their performance, but we're picking that one.)

There are lots of ways to measure how well execs have done for shareholders over time, but the most straightforward looks at how much you would have earned from buying stock and reinvesting all dividends.

Look here:

Comparison of median executive compensation to total return by Russell 1000 industry sector 2007-2012. Graphic: Bloomberg Visual Data; Source: Bloomberg Industries

Yikes! Since 2007, only health-care, consumer discretionary and technology execs have delivered shareholder returns in sync with the growth in their compensation -- and consumer-staples execs should probably ask for a raise.

Ummm, financial services? Durables? Utilities? Energy? Dear investors: Are you screaming?

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.