CHRO Pay Dips, Again
As a group, the 50 highest-paid HR executives named in filings with the Securities and Exchange Commission experienced a decline for the second year in a row in 2017. Their average annual compensation declined by 5.6 percent last year, coming on the heels of a 6.1 percent decrease the prior year.
Six more women were represented on this year’s list versus the year before. Overall, 44 percent of the top earners were women in 2017, compared to 38 percent in 2016 and 48 percent in 2015. As was the case in 2016, three of the top 10 earners were women last year.
Ranked at the top of the 2017 list was Lawrence Pope, executive vice president of administration and chief HR officer for Halliburton Co. Pope took home $8,378,148 last year.
Neil Marchuk, executive vice president and chief HR officer of Adient plc., held the No. 2 spot, earning $6,614,390. Marchuk was followed by Anthony Ambrosio, senior executive vice president, chief administration officer and chief HR officer at CBS Corp. He earned $5,322,468 last year.
Six of the executives on the 2017 list took home north of $4 million, one fewer than a year earlier.
Together, the 50 highest-paid HR executives received an average annual compensation package of $2,858,811. In contrast, those on the 2016 and 2015 lists averaged $3,029,634 and $3,228,149, respectively.
Courtney Yu, director of research of Equilar, points out that the lack of change in this year’s ranking is more noteworthy than any one change. “Thirty-one HR executives this year were on last year’s list, compared to just 21 executives from 2015 to 2016,” he says. “In addition, only four executives jumped up in position by double digits, half the amount in last year’s list.”
While the average compensation did decline, Yu says, the overall numbers are still fairly close to those reported in the prior year. “This year’s amounts could be due to fewer new HR executives, which results in fewer sign-on bonuses or promotional awards,” he says. “We also saw fewer discretionary bonuses paid out this year.”
As a percentage of CEO pay, the compensation for HR leaders remained the same as a year earlier, at 30 percent.
Their CEOs also experienced a decrease in pay averaging 6.1 percent between 2016 and 2017. According to Equilar Senior Research Analyst Alex Knowlton, the decline runs counter to what’s occurring on a broader scale, where the average CEO compensation at companies in the Equilar 500—a sample of the largest public companies as measured by revenue—increased by 2.3 percent over that period.
The 2017 HR’s Elite list was culled from a universe of 196 former and current HR executives at Russell 3000 companies who were among the five most highly compensated officers in their companies and were therefore included in those organizations’ filings with the SEC. (In 2016, 231 former and current HR executives made the cut.)
In determining the rankings, Equilar calculated total compensation as the sum of base salary, discretionary and performance-based cash bonuses, and the grant-date value of stock and option awards. (Benefits and perquisites were excluded from the calculation.) All compensation values were taken directly from the summary compensation table for each company’s proxy statement.
The top 50 earners on the list reaped essentially the same amount in full-value stock awards—$1,381,277 in 2017 versus $1,382,478 in 2016. Bonuses, meanwhile, decreased an average of 10.9 percent over that 12-month period, declining from $685,266 to $610,853. Similarly, average stock-option awards decreased by 8.6 percent—from $367,091 to $335,523. (In 2016, they declined 20.6 percent.)
As for base salaries, those on the 2017 list experienced a slight decline, averaging $515,364, compared to $523,921 in 2016.
On a per-employee basis, average HR-executive pay increased to $735 in 2017, compared to $563 in 2016. At the high end for the second year in a row, Jolanta Bott, executive vice president of operations and HR for Paramount Group, earned $10,067 per employee (nearly $2,000 more than a year earlier). On the low end, Lowe’s Cos.’ Chief HR Officer Jennifer Weber earned $14 per employee.
Not coincidentally, Lowe’s was the largest employer represented on the list, with 200,000 employees; Paramount Group was the second smallest, with 327. (The smallest employer was Host Hotels & Resorts, with only 205 employees.)
The companies this year were, as a group, somewhat smaller in size than a year earlier as far as revenue is concerned. Total revenues of the companies averaged about $14 billion, compared to around $16 billion in 2016. The average workforce size, meanwhile, declined from around 40,000 employees in 2016 to just under 34,000 employees in 2017.