At what stage should a CEO’s pay peak?: Survey

CEOs’ highest compensation should coincide with the peak of their careers, not the end of their tenure, according to an executive pay trends survey from global management consulting firm Korn Ferry.

Korn Ferry’s “Global Total Rewards Pulse Survey” includes responses from 3,880 total rewards practitioners, human resources business partners and human resources leaders across 132 countries gathered in June. About 78 of the respondents were from healthcare organizations, Korn Ferry confirmed to Becker’s.

Here are five things to know from the survey:

1. Fifty-one percent of respondents said a CEO’s target compensation should reach its highest 4-7 years into their tenure. Another 41% said it should be in the 7-11 year range, followed by late career (6%) and new to role (2%).

2. Nearly 70% said they benchmark executive pay annually, and only 5% said executive market data is very accurate. Sixty-eight percent said it is somewhat accurate.

3. More than 3 in 4 respondents said other C-suite roles — aside from CEO — are most critical to benchmark regularly. Senior vice presidents (54%) were next, followed by CEOs (51%).

4. Only 8% said executive career earnings should be capped in all situations, while 50% said yes, on a case-by-case basis, and 42% said no.

5. Eighty-eight percent of respondents said they anticipate revenue growth in the next 12 months. Sixty-six percent gave bonuses that were comparable to or above the target in the last fiscal year, and 70% expect to do so this fiscal year.

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