- S&P 500 companies paid human resource executives slightly less in total median compensation in 2015 than the previous year. A new report, HR Executive Pay Trends 2016, shows that the companies paid HR a medium compensation of $1.6 million in 2015, slightly down from $1.7 million in 2014. The report was published by Equilar, a board intelligence provider, and Allegis Partners, an international search firm.
- The report found that although compensation changed little overall from year to year, differences were more prominent between some industries. In healthcare, for example, S&P 500 companies paid top HR executives $2.3 million in 2015. The utility sector, however, was the lowest payer in the S&P group at $1.1 million, or 28% less than all other companies in the group.
- Most of the pay HR executives received, about 56%, was in long-term incentive compensation, or LTIC, such as company equity, the report showed. The two highest paying sectors, healthcare and technology, paid the biggest share of mixed LTIC.
What does long-term incentive compensation mean for HR leaders? Speculation is that S&P 500 companies pay LTIC to attract and retain top-level HR executives. HR professionals who understand the business and financial sides of their companies are highly valued, and in turn, highly paid.
CEOs and their boards might be finally recognizing HR’s importance to their companies by offering stock and other forms of LTIC. The proverbial “seat at the table” might not be so far off for HR executives.