Executive pay study shows effect of COVID-19


Grant Thornton’s sixth annual Proxy Survey of Executive Compensation in the Russell 2000 Index takes the full measure of what trends and design implications affected business leaders’ compensation during an entire year of working in the shadow of the COVID-19 pandemic.


The report was prepared by Grant Thornton’s Human Capital Services practice and includes the most recently reported compensation data broken out by Global Industry Classification Standard (GICS) sectors. As one of the most comprehensive surveys of its kind, this report includes all the companies surveyed in the Russell 2000.


The report tallies and compares salary, total cash compensation, total direct compensation and short- and long-term incentive level data for prominent C suite positions at publicly traded companies. The survey report covers data in 11 GICS sectors: Communications, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Informational Technology, Materials, Real Estate and Utilities.


This survey report also provides compensation data for each GICS sector grouped into three revenue categories:

  • Emerging/Growth: under $500 million
  • Mid-Size: from $500 million to $1.5 billion
  • Stable/Mature: more than $1.5 billion



Key Findings


Grant Thornton’s analysis found that the median CEO total cash compensation ranged between 40% to 45% of total direct compensation, with long-term incentives representing more than 56% of total direct compensation across all revenue sizes. When comparing year-over-year changes, our analysis found that while median CEO pay in the Emerging/Growth and Stable/Mature revenue categories increased moderately, compensation for nearly every other executive position decreased in the last year.


Additionally, the study found that the median CEO total direct compensation ranged between two and five times the levels of total direct compensation for other executives. These compensation ratios differed depending upon the organization’s revenue size and level of the executive.


Since the data presented in this report generally includes proxy data for companies’ calendar year 2020, this report is the first year in which COVID-19 impacted compensation levels the entire year. More broadly, limited or temporary reductions in executive pay levels align with Grant Thornton’s experience advising middle-market publicly and privately held companies throughout the COVID-19 pandemic. Many organizations chose to temporarily decrease salaries, pay below annual incentive targets (or even pay no bonuses at all) and/or reduce long-term incentive awards from the prior year.


Absent any significant market changes in the fourth quarter of 2021, Grant Thornton expects to see larger executive compensation increases in next year’s report . As the economy re-opens and continues to expand throughout calendar year 2021, companies already are reinstating temporary changes to compensation arrangements from 2020 in an effort to attract and retain their key talent.


How does your executive compensation program compare? Find out in an Oct. 14 Grant Thornton webcast “Executive compensation trends for 2022 planning & governance decisions“ where our report on the Russell 2000 survey will be discussed. Then download our full report, Proxy Survey of Executive Compensation in the Russell 2000 Index.




Eric Gonzaga

Eric Gonzaga is a Principal and practice leader for the Human Capital Services (HCS) group in Minneapolis.

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