Construction CEOs get fattest pay raise

NEW YORK (CNNMoney.com) -- CEOs in the construction industry enjoyed the biggest percentage pay increase in 2005 relative to peers in other major industries, according to a new report.

Construction CEOs' median total compensation (which includes salary, bonus and long-term incentive pay such as stock options) rose 37.6 percent to $2.6 million between 2004 and 2005, the Conference Board found in its study on Top Executive Compensation, released this week.

Pulling in a distant second, percentage wise, were CEOs of energy companies, whose median compensation jumped 25 percent to $1.6 million.

Only four industries - insurance, retail trade, manufacturing and diversified services - saw median CEO total pay rise less than 10 percent.

Using compensation data from Salary.com, The Conference Board, a business membership and research group, analyzed over 3,000 publicly traded companies of all sizes across 14 industries.

Despite the double-digit growth for CEO pay in many industries, the rate of growth has slowed in the past three years, said Conference Board compensation program manager Charles Peck.

When asked to identify some of the reasons for the increases in the past year, he pointed to relatively good profitability and stock price appreciation. CEO compensation is tied to both, at least in theory. "Does it always correlate with performance? Sometimes," Peck said.

An earlier study on CEO compensation by The Corporate Library found that 8 of the 12 highest paid CEOs in fiscal year 2005 received package increases that didn't reflect performance. Their companies underperformed their peer group even as they banked somewhere between $83 million and $295 million.

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