After modest gains the previous year, the pay packages for CEOs at large U.S. public companies took off again in 2023, according to new research from ISS-Corporate.

In a preliminary analysis of executive compensation trends for S&P 500 companies, the proxy advisory firm found that median CEO pay rose by 9.2% to US$15.7 million for the latest filing period, up sharply from the 3.1% gain reported in the previous year.

The firm’s research also found that about 70% of CEOs saw their pay rise year over year in the 2023–24 filing period, while 27% of CEOs saw their pay drop.

Among companies that increased CEO pay, the median increase was 17.3% year over year. Conversely, for CEOs that faced a reduction in their pay, the median decline was 7.5%, ISS-Corporate said in its report.

“Drilling down into the components of compensation, CEO pay changes were largely driven by increases in the value of stock and option awards,” the report said.

The median base salary for S&P 500 CEOs was up 2.8% to US$1.3 million, while the median stock award rose by 11.2% US$9.1 million, and options award were up 9.5% to US$3.1 million.

“Large company disclosures so far suggest a return to historical norms for U.S. CEO pay growth with the slower rate of growth evidenced last year likely looking to be an aberration,” said Roy Saliba, managing director with ISS-Corporate, in a release.

“The stock market continued to show resilience and exceeded most expectations during the same period as evidenced by the strong performance of many companies even when faced with higher interest rates and tighter monetary policy, potentially allaying pay and performance alignment concerns as CEO pay continues to rise,” he added.

The research found that escalating CEO pay came amid robust shareholder returns — median total shareholder returns for companies covered in the study came in at 11.6% over the same period as executive compensation rose.

Companies that hiked their CEOs’ pay also enjoyed stronger shareholder returns, with returns rising 13.2% year over year, compared with a median 9.5% increase for companies that cut their CEOs compensation.