The pay of Wisconsin's top corporate executives rose an average of 27% in 2010, a year when unemployment hovered around 8% and pay to the average worker in the state fell.

On average, total compensation for chief executive officers at 57 publicly traded companies increased by about $1 million last year, bringing the average CEO's pay up to $3.89 million. The raise more than made up for two years of compensation declines, according to the annual Journal Sentinel review of executive pay.

As a group, the 57 companies paid their chief executives more than $237 million combined last year - a sum that is greater than the 2011 general fund budget for the City of Madison.

Topping the pay charts again was Johnson Controls Inc.'s Stephen Roell, who received a 53% pay increase, bringing his pay package to run the state's largest public company up to $17.6 million.

The average worker in Wisconsin made $39,104 as of last fall, down from $39,156 the previous year, according to the state Department of Workforce Development.

So the average Wisconsin public company CEO made about 100 times more than the typical working person in 2010. Nationally, the differential is about twice that big.

"CEOs live in their own bubble universe," said Stephen Rose, research professor and senior economist at the Georgetown University Center on Education and the Workforce. "They are really outside the law of supply and demand."

Rose says that CEOs' wallets are getting fatter even though the economy remains sluggish because executive pay is set by boards of directors whose members are often wealthy individuals with connections to the chief executive.

Consultants hired to devise pay schedules also play a role in keeping CEOs' net worth in the stratosphere of wages, according to Rose and others.

Consequently, a company that wants to attract or retain a first-rate CEO feels compelled to pay the going rate.

"If you want to pay 20% below the average for your CEO, who exactly are you going to get?" asked Barry Gerhart, a professor of management at the University of Wisconsin-Madison. "Sure, they're not going to be chopped liver, but is that the strategy you want to follow? That's the position the boards are in."

Compensation is set with the goal of "attracting and retaining the right leadership," said Brian Agen, spokesman for Racine-based Modine Manufacturing Co., which paid CEO Thomas Burke $1.9 million last year. The company lost money in fiscal 2009 and 2010, but its stock more than quadrupled in its last fiscal year.

Paid 40% more

Nearly three out of every four Wisconsin CEOs who are running the same company they oversaw when the recession began in 2007 made more last year than they did in 2007. Overall, the group has posted an average pay increase of 40% since 2007.

Boards pay their top executives in a number of ways - including salary, bonuses, options to buy stock in future years at a set price, free stock, pensions, and a host of benefits. The perks can include mundane but lucrative items such as payments to 401(k) plans, or items such as country club memberships, use of corporate aircraft and free medical plans and financial planning services.

Many CEOs can point to strong performance of their companies last year to justify their wage increases. The companies in the Journal Sentinel survey saw their stock value increase by an average of 28% in their last fiscal year. Thirty-seven of the companies posted a profit, while 20 lost money.

Many of the gains to the bottom line were the result of deep cuts imposed from 2008 to 2010.

"Some of the companies that drove this unemployment and imposed pay cuts are doing well because of the cuts," said Sarah Peck, chairwoman of the finance department at Marquette University. "It's kind of a hard pill to swallow."

• Mark Furlong, chairman and CEO of Marshall & Ilsley Corp., and Curt Culver, chairman and CEO of MGIC Investment Corp., both got big pay increases even though their companies lost hundreds of millions of dollars last year and billions over prior years.

Furlong's pay package jumped 205% last year to $5.1 million. M&I, which lost $617 million last year, is in the process of being sold to Toronto-based BMO Financial Group.

MGIC lost $364 million last year, while Culver's pay went up 92% to $4.4 million.

An M&I spokeswoman declined to comment. Michael Zimmerman, an MGIC senior vice president, said Culver's pay increase was the result of accomplishments that are not reflected in the mortgage insurer's operating results.

• A dozen executives received raises even though their companies lost money last year. Highest paid of the group was Jeffrey Joerres, chairman and CEO at Manpower Inc., which lost more than $263 million last year. He was paid $8.7 million, an increase of 63%. A Manpower spokeswoman did not return repeated calls for comment.

Only four executives overseeing firms that lost money saw their pay cut last year.

• The CEO pay figures include the estimated future value of stock options and stock awards passed out last year. However, they do not do not include gains posted by executives who exercised stock options or saw their stock awards vest last year. That group of 29 executives saw the real value of their portfolios grow by a combined $97 million on top of their 2010 pay packages. Three executives accounted for more than half that sum: Timothy Sullivan of Bucyrus International Inc., which is being sold ($25.8 million); Keith Nosbusch of Rockwell Automation Inc. ($16.7 million); and Robert G. Bohn, who retired as CEO at Oshkosh Corp. ($9.5 million).

• The 10 highest-paid executives received an average of $9.8 million last year, a 65% increase over the 2009 figure of $5.9 million for those same 10 executives.

• The typical pay package for the head of a Standard & Poor's 500 company was $9 million last year - an increase of 24%, according to a survey by The Associated Press.

Critics and students of executive pay note that some pay increases for 2010 were aided by disastrous corporate performance in 2008 and 2009 - when the bar was lowered as recession-wracked companies were awash in red ink or decreasing earnings. Those poor performances made it easier to post comparative increases in earnings and stock prices last year.

The current pay system linking compensation to performance was the result of reforms prompted by shareholder activists, noted Gerhart, who holds the Bruce R. Ellig Distinguished Chair in Pay & Organizational Effectiveness at UW.

"It's hard to have a meaningful link to performance without having some meaningful payouts," Gerhart said.

The bargain-basement prices many stocks were selling for in 2008 and 2009 may help increase CEO pay in the near future as stock options and restricted stock doled out become vested, enabling the recipient to cash them out.

"There's a potential windfall sitting around in the accounts for the executives," said Patrick McGurn, special counsel at Institutional Shareholder Services.

McGurn argued that more long-term incentives should be employed when setting CEOs' pay - an action an increasing number of shareholders are calling for, he said.

In many cases, the 2010 increases were the result of cutbacks in personnel, salary or other areas - not actions that stimulate future revenue needed for growth, McGurn said.

"Long term is what it is supposed to be about," said McGurn, who has been scrutinizing corporate pay for 25 years. "A lot of CEOs profited from just getting their company's profits up over last year."

Marquette's Peck agreed. "The short-term actions that jacked up prices may not be viable in the long term," she said. "If my share price is higher but I don't have a job, then I might not like the way the CEO is being compensated."