In 2002, the stock market continued its slide, but chief executives' salaries followed a different trajectory, Reuters reports.
Chief executives in the United States took home 15 percent more cash due to
increases in salaries and bonuses, according to an analysis by Equilar Inc.
CEOs at the country's largest companies did see a 9-percent drop in total compensation,
but the decrease was mostly due to the effect of declining stock options, according
to the news agency.
Median salaries rose 6 percent and median bonuses jumped 21 percent.
"You would not think that bonuses would be up that high, given the number
of companies where the stock performance is down," says executive-compensation
consultant Brian Foley. "It's hard to think of sectors that have performed
particularly well, putting aside bankruptcy advisors."
Despite an increase in layoffs at U.S. companies and a decrease of 23 percent
in the S&P index last year, firms in general gave their chief executives
more in cash payments, Reuters reports. Reuters notes the median of total CEO
cash earnings increased from $1.51 million in 2001 to $1.74 million in 2002.
Corporate boards gave fewer stock options last year, but the number of restricted-stock
packages rose. Last year, companies gave 29 percent of CEOs restricted
stock, compared with 23 percent the previous year.
Reuters notes that more firms are turning to the restricted-stock awards in
part because it is easier to calculate their value than it is to measure the
value of stock options.