75. Executive Pay Soars But May Have Peaked

NEW YORK — The annual pay packages of American chief exec­utives continue to soar and now ex­ceed $10 million among the very largest public companies, according to a new survey.

Benefiting from a continued abundance of stock options that make up the bulk of their pay, the average compensation for chief ex­ecutives reached a record $10.9 mil­lion in 2000, a 16 percent increase over the previous year, according to the survey by Pearl Meyer & Part­ners, an executive compensation consultant in New York.

"It certainly represents a land­mark in executive pay,'' said Pearl Meyer, whose firm surveyed 51 large companies in a variety of in­dustries last summer as a way of providing an early glimpse into the pay packages that will be disclosed in proxy statements issued by companies in the coming months.

Chief executives' compensation has more than doubled since 1995, when the more than 50 companies surveyed paid an average of $4.4 million, about half of that in cash, according to the study.

But while a buoyant stock market and generous awards of stock op­tions have helped push their average pay into eight figures for the first time, chief executives may not be able to look forward to such lar­gesse, Ms. Meyer said.

"We may be coming to the end of a golden era," she said, adding that the slowing economy and the down­turn in many of these companies' stocks are not yet reflected in the levels of executive pay.

Stock options continue to be the currency of choice, accounting for 60 percent of the compensation packages awarded to chief execu­tives, according to the survey.

The average executive received $6.5 million in options, an increase of 28 percent from 1999. The op­tions are valued at one-third of their grant value.

Companies are continuing to award large grants, Ms. Meyer said, adding that "the megagrant is now standard" rather than the excep­tion.

The details of proxy statements are expected to reflect how compa­nies are handling significant de­clines in their stock prices.

Executives may have been given options at prices higher than the current stock price, for example, and companies may choose to reprice those options.

"You're going to see more changes in option practices," Ms. Meyer said.

The use of options is pervasive in the compensation packages of other senior executives, according to the survey, and has reached at least half the total pay for chief financial of­ficers and the like for the first time.

But companies were also gen­erous with annual bonuses to their chief executives, which rose 20 per­cent over the last year, to an average of $2 million, according to the sur­vey.

Salaries, once the bulk of exec­utive compensation, now account for just 10 percent of pay packages, increasing 4 percent in the last year.

In keeping with the preference for stock options and a move away from performance-based plans, the only portion of executive pay to decline was long-term incentives.

Those incentives decreased by 16 percent from 1999 and now rep­resent about 12 percent of total com­pensation, according to the survey.

"You are on the cusp of the turn," Ms. Meyer said.

VOCABULARY CHECK

1. «Золотое рукопожатие» - увольнение одного из руководителей компании с уплатой ему значительной финансовой компенсации.

2. «Золотое приветствие» - разовое вознаграждение при привлечении особо полезного сотрудника в новую фирму.

3. Выходное пособие – компенсация при увольнении. Такая выплата может быть единовременной или производиться равными суммами в течение некоторого периода времени.

4. Дополнительные льготы, выплаты и привилегии включают в себя владение акциями компании, полностью оплачиваемые отпуска, субсидированное жилье, служебный автомобиль и др.

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