CEOs’ Cash Pay Was Up 16% in ’03

The rebound in U.S. corporate profits and return of the stock market bull last year stoked a 16% rise in 2003 cash pay for America’s top executives, most of the gain coming from a 20% rise in CEO bonuses.

Median cash pay for chief executives -- base salary and bonus -- grew to $2,029,500 from $1,750,000 in 2002, according to a study of 345 of the Standard & Poor’s 500 companies. The study was conducted by Equilar for Reuters.

Bonuses overall leaped 20.4% to $1,064,099 from $883,944, and six out of 10 CEOs enjoyed lump sums last year. The median base salary increased to $950,000, up 3.1% from 2002.

However, long-term pay fell because U.S. corporations were replacing stock options with other forms of equity-based compensation, and not on a “dollar-for-dollar” basis.

With this segment declining, the overall value of all the different types of CEO pay last year slipped 1.2% to $6,871,470.

“The relationship between pay and performance is pronounced,” said Peter Chingos, head of Mercer Human Resources Consulting executive compensation practice.

The analysis of company proxies included only CEOs who held the post for both years.

Overall, the median value of long-term incentives -- composed of options, restricted stock awards and long-term incentive plan payouts -- fell nearly 10% from 2002 to $4,682,400.

Restricted stock is an outright grant of shares and, after a vesting period, is treated as income.