More than two-thirds of CEOs at S&P 500 companies received a raise last year, according to the AP/Equilar study, because of the bigger profits and higher stock prices.
CEO pay remains a divisive issue in the U.S. Large investors and boards of directors argue that they need to offer big pay packages to attract talented men and women who can run multibillion-dollar businesses.
"If you have a good CEO at a company, the wealth he might generate for shareholders could be in the billions," says Dan Mitchell, a senior fellow at the Cato Institute, a libertarian think tank. "It might be worth paying these guys millions for doing this type of work."
CEOs are still getting much bigger raises than the average U.S. worker.
The 8.8 percent increase in total pay that CEOs got last year dwarfed the average raise U.S. workers received. The Bureau of Labor Statistics said average weekly wages for U.S. workers rose 1.3 percent in 2013. At that rate an employee would have to work 257 years to make what a typical S&P 500 CEO makes in a year.
"There's this unbalanced approach, where there's all this energy put into how to reward executives, but little energy being put into ensuring the rest of the workforce is engaged, productive and paid appropriately," says Richard Clayton, research director at Change to Win Investment Group, which works with labor union-affiliated pension funds.
Investors have become increasingly vocal about executive pay since the recession. This has led to an increasing number of public spats between boards of directors, who propose pay packages, and shareholders, who own the company. These fights become public during "say on pay" votes, when shareholders have an opportunity to show they approve or don't approve of pay packages. Votes are non-binding, but companies sometimes act when there is clear disapproval from shareholders.
Petrello was the best-paid CEO largely because the board of directors of Nabors Industries' wanted to end his previous contract. Under that contract, Petrello could have been owed huge cash bonuses, and the company could have paid out tens of millions of dollars if he were to die or become disabled. The board changed his contract following "say on pay" votes in 2012 and 2013 that showed shareholders were unhappy with how Nabors paid its executives.
There have been other signs of shareholder concern about CEO pay. This month, 75 percent of Chipotle Mexican Grill shareholders voted against a proposed pay package for co-CEOs Steve Ells and Montgomery Moran. Ells earned $25.1 million in 2013 while Moran earned $24.3 million, a 27 percent rise in compensation for each. Chipotle spent $49.5 million on CEO pay last year, the fourth highest in the S&P 500.
"Companies are now taking the time to think through their pay practices and are talking more with shareholders," says Hewitt of GMI Ratings. "There's still a long way to go but pay practices are getting better."
To calculate a CEO's pay package, the AP and Equilar looked at salary as well as perks, bonuses and stock and option awards, using the regulatory filings that companies file each year. Equilar looked at data from 337 companies that had filed their proxies by April 30. It includes CEOs who have been at the company for two years.
One prominent name not included in the data was Oracle CEO Larry Ellison, who is typically one of the best paid CEOs in the country.
Oracle files its salary paperwork later in the year, so Ellison was excluded in the 2013 survey data. He was awarded $76.9 million in stock options for Oracle's fiscal year ending May 2013, according to proxy filings.
Among other findings:
— Female CEOs had a median pay package worth more than their male counterparts, $11.7 million versus $10.5 million for males. However, there were only 12 female CEOs in the AP/Equilar study compared with 325 male CEOs that were polled.
— The CEO who got the biggest bump in compensation from 2012 to 2013 was Rodney Sacks, the CEO of Monster Beverage. Sacks earned $6.22 million last year, an increase of 679 percent. Monster's board of directors awarded Sacks $5.3 million in stock options to supplement his $550,000 salary and $300,000 cash bonus.