Compensation of the 50 highest paid CEOs of Minnesota public companies increased 7.3% to $495.5 million, thanks to increasing payouts from long-term equity markets.
But the total is down 23.6% from the 2020 list, which included CEOs who benefited from one of the longest bull markets in U.S. stock market history.
CEO compensation packages are generally driven by stock awards, tying their value to the rise and fall of the company’s stock price.
In many instances, only 10% to 20% of a CEO’s overall pay comes from base salary while the bulk of pay packages are made up of short-term and long-term compensation elements that are largely dependent on financial and share price performance.
The overall stock market had back-to-back years of 20% returns in 2023 and 2024 which helped to build back up the value of executives’ long-term equity awards after the S&P 500 Index fell by 19% in 2022.
All but six of the CEOs on the list this year had gains from previously issued long-term equity awards, either exercised stock options or value from restricted shares that vested during the year. Overall, 72% of the compensation from the list this year was from the value of long-term equity awards up from 69% from the prior year.
Nationally, the 100 highest paid CEOs of public companies made 21.9% more overall, with two compensation packages over $100 million (Patrick Smith of Axon Enterprise, Inc. and James Anderson of Coherent Corp.). Differently than the Star Tribune, Equilar, which compiled the data for the New York Times, counts stock and options awards valued at grant date.
This is a list of Minnesota’s highest-paid current or recently retired executives.