The median pay package for chief executives at 1,400 companies rose 16% last year to $3 million, about half the increase of the year before, a new study reported.
A study by the Corporate Library, a Portland, Maine-based corporate governance research organization, said the slowing growth of executive pay could be explained by a drop in stock option awards. In 2004, the median, or midpoint, CEO pay had risen 30%, the organization said.
"We have some pretty dramatic findings, although not as dramatic as last year," said Paul Hodgson, a senior research associate at the Corporate Library, who prepared the report.
The midpoint of compensation for the CEOs in the Corporate Library study compares with median pay of just under $7 million for chiefs of the 500 companies in the Standard & Poor's market index.
CEOs of smaller companies had pay increases of less than 4% in 2005, Hodgson said. "Most of the high-level increases are being driven by mid-cap and large-cap companies," he said.
The Census Bureau reported in August that the median household income in the United States, adjusted for inflation, climbed 1.1% to $46,326 in 2005. Per capita income was $25,036 last year, a 1.5% increase from 2004.
Barry Diller, the billionaire CEO who runs Internet company IAC/Interactive Corp., received the highest pay in fiscal 2005, with a total package in excess of $295 million, most of it from profit on the exercising of stock options, the Corporate Library said.
Sehat Sutardja, chief of Marvell Technology Group Ltd., a maker of semiconductor chips used in laptop computers, received the highest increase in compensation last year -- up nearly 14,000%, according to the study. His $75.4-million total package includes a $75-million profit from exercising stock options. In 2004, Sutardja earned $536,500 and didn't exercise any options.
Marvell is based in Hamilton, Bermuda, but run out of Santa Clara, Calif.