Over the past few years, the pay packages of Hawaii’s chief executive officers (CEOs) have seen significant fluctuations. While some executives have experienced modest gains, others have witnessed sharp drops, mirroring national trends in executive compensation.

Hawaii CEO Compensation Trends

In 2022, Hawaii’s highest-paid CEOs enjoyed an average compensation boost of only 2%, taking the average to around $3.4 million. This modest increase was linked to a tough business climate and higher interest rates. Even though the increase was low, critics believe that such wages are still disproportionately high when contrasted with the state’s average household income. Sergio Alcubilla, co-executive director at the Hawaii Workers Center, emphasized the disparity as the average CEO pay is more than 30 times the state’s average household income.

National Decline in CEO Compensation

Nationally, CEO pay has decreased. In 2023, the compensation for CEOs of the biggest publicly traded companies in the Charlotte region fell 14%, consistent with a 19.4% national drop from 2022 to 2023. That is notable given that from 1978 through 2023, realized CEO pay rose by 1,085%, well ahead of the 24% increase in average worker compensation during those same years.

Case Study: Hawaiian Electric Industries

Hawaiian Electric Industries Inc. (HEI) offers an interesting example of recent compensation trends. In spite of suffering a net loss of $1.4 billion in 2024, largely due to Lahaina wildfire settlements, HEI’s highest-paid executives received hefty raises. Scott Seu, HEI’s CEO and president, had his total compensation rise to $6.5 million in 2024, from $5.4 million in 2023. The same went for Shelee Kimura, Hawaiian Electric Co., Inc.’s president and CEO, who received $2.6 million, up from $2.1 million last year. The firm defended these hikes by arguing that the executives’ work to avoid bankruptcy and strengthen the firm’s financial status without burdening customers further merited the increments. Honolulu Civil Beat

Factors Affecting CEO Pay

A variety of factors affects the variations in CEO pay:

Company Performance: Executive compensation tends to be associated with the firm’s financial health and performance. During difficult economic times, bonuses and stock options can decline, resulting in lower total compensation.

Stock Market Trends: With much of CEO pay tied to the performance of stock, falling markets have the direct potential to hurt the value of options and awards.

Public and Shareholder Scrutiny: Greater sensitivity to the widening of the income gap and increasing criticism have focused executive compensation on increased public and shareholder scrutiny, pushing some companies to revisit and remake pay packages.

The Path Forward

The latest trends in CEO pay, both in Hawaii and across the country, point toward more performance-based and more scrutinized compensation arrangements. As firms face economic adversity and societal pressures, aligning executive pay with firm performance and stakeholder interests will be key to preserving trust and supporting sustainable growth.