1. Adolph Berle and Gardiner Means, The Modern Corporation and Private Property (New York: Macmillan, 1933).
2. Starting with data for 1992, Standard & Poor’s produced a product called ExecuComp, a database of detailed information about the compensation of CEOs and other top executives. To compile the database, ExecuComp draws on reports that public companies are required to file with the Securities Exchange Commission, the firms’ 10-k’s. In most instances, the firms report detailed compensation on the CEO and the other four most highly paid executives in a given year, specifying the name of the executive along with details on the amount paid through each avenue by which the executive might receive compensation: salary, bonus, grants of restricted stock, grants of stock options, payments from long-term incentive plans, and so on. ExecuComp focuses on the 1,500 largest firms and breaks those down into the S&P 500, the next 400 Mid-Cap firms that S&P follows, along with an additional 600 yet smaller firms. The entire data file encompasses detailed compensation data on more than 33,000 executives and 3,000 different firms.
ExecuComp has become the standard data source for analyzing executive compensation, and it is widely used in both academic and industry studies. This book and the studies it reports draw heavily on the ExecuComp database for the period 1992 forward. The Sarbanes-Oxley Act of 2002 specified some changes in the reporting requirements for firms, and these came into effect in 2006. This change in reporting induces a slight discontinuity in the ExecuComp data, separating it into the 1992–2005 period and the 2006-forward period, but the levels are largely consistent for the two periods. At any rate, data for post-2005 are no longer available in the form in which they were reported prior to Sarbanes-Oxley.
3. Note that amounts reported for individuals can differ markedly depending on the assumptions under which they are computed. For Jamie Dimon of JPMorgan Chase, for example, table 1.1 shows his 2009 compensation as $1.322 million. However, Reuters reports that he also received about $16 million in stock and bonds as compensation for 2009, although this sum was paid in 2010. Other sources are inclined to count this $16 million as part of his 2010 compensation, leading to the potential double-counting of the $16 million in both 2009 and 2010. It might also lead to that amount never being counted. By contrast, the ExecuComp data provide a consistent approach to the compensation issue. See Jonathan Spicer, “JPMorgan CEO Dimon’s 2009 Salary $1.32 million,” Reuters.com, March 19, 2010. See also NYDailyNews.com, “JPMorgan Chase CEO Jamie Dimon Gets Massive $16M Pay Package,” February 5, 2010.
4. Susanne Craig, “Goldman Sachs Gives Blankfein a Big Raise,” New York Times, January 28, 2011.