April 01, 2022


Early Filers: Performance Bounced Back. CEO Pay Up.

CAP reviewed chief executive officer (CEO) pay levels among 50 companies with fiscal years ending between August and October 2021 (defined as the Early Filers). 2021 was a bounce back year. Median financial performance in all measures reviewed was up double digits over 2020 and median CEO total pay was up +19%. Higher bonus payouts, up nearly +75% year over year, drove the increase in CEO pay. This report covers 2021 financial performance, CEO actual pay levels and annual incentive payouts for the Early Filers.

Key Findings

Performance: 2021 median performance – as measured by revenue, pre-tax income, and earnings per share (EPS) – was higher than 2020. Revenue (+17.1%), pre-tax income (+62.5%), EPS (+71.0%), and one-year total shareholder return, or TSR, (+35.8%) were all up substantially.

CEO Pay: Median CEO pay increased by +19%. CEO pay is up largely because of a dramatic year over year increase (+73%) in the annual incentive payout. Base salaries were flat at median and the grant-date value of long-term incentives (LTI) increased +11%.

Annual Incentive Payouts: Approximately 90% of companies in this study had a payout that was at or above target. Median payout in 2021 was 145% of target which is significantly higher than median in both 2020 and 2019 (81% and 90%, respectively). A little over 40% of Early Filers had a payout that was 150% of target or higher (compared to 21% in 2020 and 7% in 2019).

Say on Pay Results: Median say on pay vote outcome was 95% in 2021 for Early Filers. However, nearly 40% of companies saw a shift of +/- five percentage points year over year. Despite this volatility, less than 5% of companies in our study failed the say on pay vote this year.

ESG Disclosure: Nearly all Early Filers include a discussion on the ESG strategy and/or compensation-related actions in the proxy statement. Around 50% of these companies include ESG as a metric in the incentive plan design (up from 30% in 2019).

2021 Performance

Median 2021 financial performance (revenue, pre-tax income and EPS) and TSR performance for the Early Filers rebounded significantly from 2020 levels. High growth is likely a result of substantially lower financial results in 2020 due to the COVID-19 pandemic. Among the Early Filers:

  • Median revenue growth (+17.1%), pre-tax income (+62.5%), and EPS growth (+71.0%) were all up significantly from 2020 levels, with EPS seeing the most improvement
  • Median TSR was also up +35.8% from 2020 levels

In general, median 2021 financial performance among the Early Filers (measured through each company’s fiscal year end) was comparable to median 2021 performance of the S&P 500 (measured through September 30, 2021), with both groups experiencing a rebound compared to 2020. However, revenue, pre-tax income and EPS growth were considerably higher for the Early Filers; TSR growth was similar among both groups.

2020 Median 1-year Performance

2021 Median 1-year Performance

Financial Metrics

S&P 500

Early Filers

S&P 500

Early Filers

Revenue Growth





Pre-tax Income Growth





EPS Growth










Note: Reflects companies in the S&P 500 as of February 2022. For the S&P 500, financial performance and TSR are as of September 30, 2020 and September 30, 2021. For Early Filers, financial performance and TSR are as of each company’s fiscal year end.

CEO Actual Total Direct Compensation

Median total direct compensation – base salary plus actual bonus payout plus grant-date value of LTIs – was up +19% in 2021 for the Early Filers. This increase in pay was driven by a substantial year over year increase in bonus payouts (+73% at median) and is reflective of strong financial performance. Even at the 25th percentile, annual incentive payouts were up +11%. This increase in bonus payouts is also partly due to an increase in target bonuses; 20% of Early Filers increased the CEO’s target bonus opportunity.

Companies generally did not increase base salaries for the CEO in 2021. Instead, companies were more likely to increase the LTI opportunity. The grant-date value of LTI was up +11% in 2021 which is consistent with the median increase in 2020. These increases were typically approved in the first quarter (e.g., September 2020 to January 2021, depending on fiscal year end) and were generally granted to recognize prior year company and/or individual performance.

3%5%5%10%10%0%73%45%11%19%Base SalaryActual AnnualIncentiveActual Total CashGrant-Date Valueof LTITotal Comp1 - Year Change in Median CEO Pay2020 (n=38)2021 (n=39)

Note: Reflects same incumbent CEOs.

Annual Incentive Plan Payout

Median CEO annual incentive payout was 145% of target in 2021 which was higher than 75th percentile payouts in both 2020 (132%) and 2019 (122%), reflective of strong financial performance. This is the highest median payout that CAP has observed in the ten years it has been tracking Early Filers payouts. In fact, 25th percentile payout in 2021 (122%) was around the 75th percentile payout for the prior two years.

Annual Incentive Payout as a % of Target

Summary Statistics




75th Percentile








25th Percentile




In 2021, approximately 90% of Early Filers had an annual incentive payout that was at or above target which was more than 2020 (when 32% of companies had at or above target payout). The distribution of above target payouts in 2021 was generally split with 46% of companies providing a payout between 100 – 150% and 43% of companies providing a payout that was 150% of target or higher.

16%28%2%37%40%9%40%11%46%7%21%43%0%10%20%30%40%50%60%70%80%90%100%201920202021Annual Incentive Payout as a Percentage of Target <50%50% - 100%100% - 150% 150%

Note: N = 44. Reflects corporate payout factor and excludes CEOs that do not have a target bonus opportunity.

Approximately one-third of Early Filers incorporate individual performance in the annual incentive payout for the CEO. This means that the corporate payout factor (i.e., the percentage at which the annual incentive funds based on company performance) as a percentage of target might be higher or lower than the CEO’s payout as a percentage of target. In 2020, the corporate payout factor was generally aligned with the CEO’s payout. For example, 40% of companies had a corporate payout factor between 50% and 100% of target and 35% of CEOs were within the same range. The differential between the corporate payout factor and CEO payout in 2020 was five percentage points in all ranges. This trend was similar in 2019.

However, in 2021, the variation between the corporate payout factor and the CEO’s payout as a percentage of target was larger, particularly for above target payouts. The percentage of CEOs with a payout at or above 150% of target was 13 points higher than the percentage of companies with a corporate payout factor in the same range (56% vs. 43%). This suggests that companies were more likely to use the individual performance component to reward CEOs for delivering strong financial and stock price results as well as navigating the pandemic and achieving other strategic goals.

Distribution of 2021Annual Incentive Payout 2%9%46%43%2%7%35%56%<50%50-100%100-150%150%Corporate FundingCEO Payout as a % of Target28%40%11%21%23%35%16%26%<50%50-100%100-150%150%Distribution of 2020Annual Incentive PayoutCorporate FundingCEO Payout as a % of Target

Say on Pay Findings

This proxy season is shaping up to be another year where shareholders will use the say on pay vote to signal to companies their satisfaction (or dissatisfaction) with the organization’s pay level, structure and/or performance. While median support was around 95% in both 2021 and 2020, the distribution of support varies dramatically. Approximately 40% of companies saw a swing of +/- five percentage points year over year. In 2020, 72% of companies received at or above 90% support, while in 2021 that number dropped to 65%. However, the level of support in the 80 – 90% range increased significantly in 2021 to 24% up from 6% in 2020. Despite this volatility, less than 5% of companies in our sample failed in either year.

4%4%10%4%6%72%3%0%4%4%24%65%<50%50-60%60-70%70-80%80-90%90%Say on Pay Vote Outcomes2020 Vote2021 Vote

Environmental, Social and Governance (ESG) Disclosure

ESG has been a hot topic in executive compensation for the past several years. Companies are not only discussing the strategy around ESG, but also how to share this strategy with investors, and if these measures of success on the ESG strategy should be incorporated in the executive compensation program. While a company’s Corporate Social Responsibility report is published on its website, more and more organizations are starting to put detail around ESG initiatives within their proxy statement. Nearly all (95%) Early Filers include their ESG strategy either within the Compensation Discussion and Analysis (CD&A), through a discussion of ESG-related performance highlights or compensation-related actions, or in the broader proxy statement. We have even seen companies discuss the expanded roles of the board in relation to ESG, including the formation of ESG-specific committees.

About half of Early Filers now incorporate ESG metrics into their incentive plans, up from around 30% of companies in 2019. The overwhelming majority of companies with an ESG-related metric include it in the annual incentive plan; only one company in the sample uses an ESG measure in a long-term performance share plan. Companies are most focused on diversity, equity and inclusion (DE&I) and sustainability/environmental metrics when using ESG measures in incentive plans. Practice continues to be mixed as to whether ESG initiatives are included in incentive plans as a weighted metric, modifier or as part of individual goals. Companies typically use a qualitative assessment of performance, even when there are objective and measurable goals, to ensure executives are being rewarded for the right performance and behaviors. When ESG metrics are a weighted component, they are often included with a basket of other strategic initiatives as part of a scorecard, and generally have about a 5 – 10% impact on the annual incentive payout.

Looking Ahead

2021 was a bounce back year. For calendar year companies, we would expect to see a substantial increase in annual incentive payouts, although this will vary by industry and be based on each company’s performance. In 2021, we saw significant wage increases deeper in the organization across many industries and sectors in an effort to keep top talent during the "Great Resignation." Given strong company performance in 2021, we would anticipate seeing increases in CEO target pay for 2022, delivered largely through increases in the LTI value to align CEO pay with shareholder value creation.

Going forward, we expect that companies will continue to incorporate individual performance in the annual plan payouts. In addition to rewarding for operational goals, the individual component can be a tool that committees can use to assess progress relative to ESG initiatives. However, there should be a structured framework for determining individual performance to eliminate ambiguity in the decision-making process and allow investors to feel comfortable with the process.

Early Filers’ Company Sample

CAP’s study reflects 50 companies with fiscal years ending between August and October 2021. Industry sectors reviewed include: Consumer Discretionary, Consumer Staples, Financials, Health Care, Industrials, Information Technology and Materials. Revenues for these companies ranged from $2 billion – $366 billion (median revenues of $10 billion); median fiscal-year-end market capitalization was $16 billion.

Jared Sorhaindo and Kristine Stanners provided research assistance for this report.