Dive Brief:
- Marten Transport’s CEO pay grew less quickly percentagewise than that of its median employee, up 17% compared with 30%, according to information provided in annual reports for 2021 and 2022.
- Total compensation for its CEO rose from $1.417 million at the end of 2021 to nearly $1.656 million at the end of 2022, while a calculation for the median employee changed from $60,317 to $78,156 during the same period, according to annual reports.
- “We believe our executive compensation program must be consistent and internally equitable to motivate our employees to perform in ways that enhance shareholder value,” the firm said in its latest annual report, filed March 15. “We are committed to internal pay equity.”
Dive Insight:
Over the last two years, the pay ratio between Marten’s CEO and its median employee lessened from 23-1 to 21-1, but the company noted in its latest annual report that other carriers’ averaged 82-1 in 2021.
The Wisconsin-based carrier compares itself to a group of five peer companies — Covenant Logistics Group, Heartland Express, Knight-Swift Transportation Holdings, P.A.M. Transportation Services and Werner Enterprises — competing for executive talent and stockholder investments.
“We initially fix base salaries for our executives at a level we believe enables us to hire and retain them in a competitive environment and to reward satisfactory individual performance and a satisfactory level of contribution to our overall business objectives,” Marten said in the annual report. “We also take into account the base compensation paid by companies in our peer group.”
The ratio comparing CEO compensation to median employee pay, prompted by a mandate from the Dodd-Frank Act, serves as one metric to provide accountability and information to help investors assess companies.
The Securities and Exchange Commission first implemented the pay ratio rule for fiscal years that ended after Jan. 1, 2017, but researchers soon noted the lack of uniformity in how firms can calculate the ratio, creating problems for comparing companies. For example, firms can exclude certain employees from the calculation, such as workforces in another country.
Adding complexity to comparisons are differences in company size and executive compensation, where many of Marten’s competitors pay much higher than that of Marten Transport CEO Tim Kohl. Most of the carrier’s peer group CEOs received compensation that was greater than $5 million in 2021, according to a Transport Dive analysis of securities filings.
Companies are having shareholders vote on financial compensation programs at annual meetings. Marten’s is May 2.
