A new report from executive compensation and leadership consultancy Pearl Meyer reveals significant shifts in CEO compensation strategies among S&P 500 companies, based on an analysis of the first 100 proxy filings of 2024. The most striking headline: median total compensation for CEOs increased 9.8% year-over-year, reaching $17.7 million, up from $16.1 million in 2023.
Amid shifting business priorities, board oversight, and stakeholder expectations, performance-based compensation has firmly taken center stage. Pearl Meyer’s findings underscore an accelerating trend toward “pay for performance” models—where executive rewards are directly tied to company outcomes.
Compensation Trends: 2024 vs. 2023
Here’s a breakdown of the most significant findings from Pearl Meyer’s early proxy analysis:
1. Overall CEO Pay Growth
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Median total compensation rose 9.8%, from $16.1M in 2023 to $17.7M in 2024.
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This growth reflects increased emphasis on both short- and long-term incentives.
2. Stable Base Salaries
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Median base salary increased modestly by 4%—from $1.25M to $1.3M.
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Nearly half of the companies did not adjust base salaries, highlighting a shift in value emphasis toward performance-based rewards.
“Boards are placing a greater emphasis on performance-based, at-risk pay for CEOs,” said Matt Turner, President of Executive Compensation Consulting at Pearl Meyer.
3. Cash Bonuses on the Rise
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Annual cash bonus payouts increased 13%, rising from $2.13M in 2023 to $2.41M in 2024.
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This rise aligns with stronger company performance metrics and more aggressive incentive targets.
4. Performance-Based Equity Dominates
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Long-term incentive (LTI) values increased by 7%, up to a median of $12.49M from $11.72M.
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The composition of LTI:
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60% Performance-based stock
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24% Restricted Stock Units (RSUs)
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16% Stock Options
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Boards are using performance-based equity as a tool to directly tie executive rewards to shareholder outcomes and long-term value creation.
Shifts in Boardroom Priorities
5. Security-Related Perks Increase
There has been a noticeable rise in executive security-related perquisites between 2023 and 2024, indicating that boards are responding to increased public scrutiny and evolving risk environments for C-suite leaders.
6. Decline in DEI-Linked Incentives
Pearl Meyer’s report notes a sharp decline in diversity-related incentive measures, suggesting a shift in focus from social metrics toward financial and operational performance indicators.
“Boards are very attuned to market circumstances in their concern about security and socio-political environments,” Turner added.
Strategic Implications for Boards
The findings from Pearl Meyer’s research emphasize the need for strategic alignment in executive compensation planning. While market volatility and public expectations are ever-present, boards are advised to:
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Anchor incentive design to business strategy, rather than reactive external measures.
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Balance fixed and variable pay with emphasis on long-term performance metrics.
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Monitor evolving trends in executive security, public accountability, and shareholder engagement.
“Boards should remain attuned to external environmental factors, but use business strategy as the guiding star,” said Turner.
A New Era of CEO Compensation
Pearl Meyer’s 2024 compensation analysis reveals a continued evolution in how boards view executive pay. While base salaries remain relatively stable, performance-based incentives—particularly equity grants—are driving compensation growth. These models reinforce accountability and ensure that leadership rewards are aligned with measurable success.
As economic, regulatory, and public pressures continue to influence governance, the shift to strategic, transparent, and at-risk compensation structures will likely define the next phase of boardroom leadership.
