CINCINNATI - There were 12 Cincinnati companies that paid at least one executive more than 100 times the average worker in their industry in 2015.
What do those 12 companies have in common?
Bigness.
All but one is worth more than $1 billion in market capitalization, which is the total value of a company’s stock at any point in time. Eight of the 12 have market caps higher than $5 billion.
As a general rule, the bigger companies get, the more complicated and lucrative their pay plans become.
Procter & Gamble Co., with a market cap of $221 billion, used more than 15,000 words to explain its pay plans in an annual proxy statement to shareholders last year. P&G has five executives in the 100x club this year, more than any other company.
Meridian Bioscience Inc., with a market cap of $816 million, needed only 7,400 words to explain its pay plans. All but one of its highest-paid executives made less than 11 times the average worker in the surgical and medical-equipment manufacturing industry.
Both companies use a combination of cash and stock to reward executives, but bigger companies tend to put more pay at risk than smaller firms.
At P&G, 70 percent of compensation for its highest-paid executives is in the form of stock awards that could rise in value if the consumer-products giant succeeds or become worthless if it fails. At Meridian, 54 percent of pay carries no risk; it’s base salary, bonus and perks, all paid in cash.
This is part of WCPO’s annual analysis of executive pay, which includes a searchable database with details on $390 million in 2015 pay for 151 executives from 29 companies.
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We pulled details from the larger database for the interactive chart below:
METHODOLOGY
WCPO obtained compensation data from S&P Global Market Intelligence, which pulled it from annual proxy statements companies filed with the Securities and Exchange Commission. Specifically, compensation data from the "summary compensation table" in each company's proxy document was analyzed. The pay category Changes in Pension Value was excluded from tabulations, because it is an actuarial estimate and does not reflect actual gains and losses. Some executives benefit from above-market interest rates in their pension plans. Those benefits, when disclosed, are counted as cash-based pay.
That data was combined with average worker salary data from the Bureau of Labor Statistics report: May 2015 National Industry Specific Occupational Employment and Wage Estimates.
North American Industry Classification System (NAICS) data was also used to most closely match each company to determine average industry worker salary, although many companies actually compete in multiple categories. NAICS data is the standard used by federal agencies to classify businesses in order to collect, analyze and publish statistics tied to the U.S. economy.
