There is perhaps no more contentious issue that compensation. The contentiousness becomes even more heated when discussing CEO pay. Question – which industry has the highest paid CEOs?
Here’s a look at average CEO pay and CEO pay growth by industry according to recently released figures by Pitchbook. Before looking, which industry would you guess wins? Finance? Perhaps Chemicals or another hard industry?
Average CEO Pay by Industry
The following graphic is CEO pay by industry in 2014 (publicly traded companies or estimated privately held companies), as estimated by Econometric Studios, the Wall Street Journal, or the AFL-CIO (click on the zoom button to get a better view). The overall average is about $5.6 million.
Interestingly, on the bottom is Agriculture production at $1.1 million. Other members of the bottom 10 include Miscellaneous Repair Services at $1.3 million, Social Services at $2.0 million, Agriculture Production Crops at $2.1 million, Depository Institutions at $2.2 million (does the depository institutions finding surprise you?), State Commercial Banks at $2.2 million, Holding and Other Investment Offices at $2.4 million, Metal Mining at $2.5 million, Legal Services at $2.8 million, and Educational Services at $2.9 million.
On the other end, tenth place belongs to Securities Brokers, Dealers, Exchanges and Services at $8.2 million. The ninth through sixth spots belong to General Merchandise Stores at $8.7 million, Insurance Carriers at $9.6 million, Motion Pictures at $9.7 million, and Hotels, Rooming Houses, Camps, and Other Lodging Places at $10.1 million respectively
Now to the top 5. In fifth place is Communications at $11.0 million. Fourth, third, and second place belong to Petroleum Refining and Related Industries at $12.5 million, Railroad Transportation at $12.5 million, and Tobacco Products at $13.1 million.
And the top spot – Private Equity|Venture Capital. The average CEO pay is about $15 million.
Where is Pay Heading?
With the current overall picture established, where is pay heading? Early indications are positive for the managers of companies. As an example, a recent survey by Stanford University concluded that corporate directors give CEOs considerable credit for corporate success. Pay, obviously, follows perceived contribution to success. The Stanford study is one of many that agree with the view, indicating that CEO pay is likely to continue to grow quickly in the coming years.
Conclusion
In looking at CEO pay by industry, some interest details emerge. The financial industry comes out fairly well, with two financial sectors – Securities and Private Equity|Venture Capital – coming in in the top 10.
Yet it’s not all top spot for the financial industry. Depository Institutions (banks), State Commercial Banks, and Holding|Investment Offices are in the bottom 10.
It appears that it pays, literally, to be in the risky section of the financial industry.
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