Stock ownership is intended to strengthen the tie between directors and shareholders. In the manufacturing sector, total compensation, including all forms of pay for outside directors, increased a whopping 46 percent. Among service companies, the change was 27 percent, while in financial services the difference was 12 percent. The attached table compares median basic compensation and median total compensation for 1999 and 2000 in the three major industries.
Basic pay includes fees and retainers for board and committee service.
The report covers 1,967 companies in 14 major industries. In particular, they are making significant grants of stock options. The value of CEO option grants in 1999 ranged from 89 percent of base salary in stock insurance companies to 245 percent in computer services. With the exception of insurance, all industry sectors reported grants with values greater than 100 percent of salary. CEO bonuses for 1999 were greatest in transportation and computer services.