What recession? CEOs are being paid more than ever as millions of American's struggle to make ends meet



Wall Street fat cats are getting paid better than ever before, while the rest of the country is still trying to drag itself out of recession.



On 'Main Street' jobs are harder to come by, housing prices are still tumbling and more Americans are struggling to make ends meet. But in the boardroom it’s as if the financial collapse never happened.



CEOs in the nation’s largest companies raked in more money last year than they earned in 2007 – when the US economy was booming, the stock market was setting record highs and unemployment was roughly half what it is today.



Fat cats...still: Philippe Dauman, left, CEO of Viacom, made $84.5million while Ray Irani, at Occidental Petroleum, right, racked up $76.1million



The typical pay packet for the head of a company in the Standard & Poor’s 500 was $9 million in 2010 – 24 per cent higher than the previous year.



According to analysis by the Associated Press, using statistics provided by Equilar – an executive compensation research firm – top company bosses were showered with higher salaries, bigger bonuses, larger slices of stock and other lucrative perks.



Two-thirds got bonuses bigger than the ones they received in 2009, with some payouts more than three times as big.



Many of these bosses were the same ones lambasted by President Barack Obama during the economic collapse for expecting massive bonuses even as taxpayers were forced to bail out key banks and financial institutions.



Big winners: Leslie Moonves, left, CEO of CBS, was awarded almost $57m in 2010m while Discovery Communications' David Zaslav, right, took home $42.6m

Last year, CEOs were rewarded because corporate profits soared in 2010 as the economy gradually got stronger and companies continued to cut costs.



Profit for the companies in the AP analysis rose 41 per cent last year. The stock market also continued its climb.



Stocks rose 13 per cent in 2010 and have now almost doubled since March 2009.



The market's two-year run has fattened executive bonuses because some CEOs are rewarded for how the company's stock does.

Separately, the bull market has left CEOs enormous paper gains on stock and options they were granted as part of pay packages in 2009 and 2010.

Richard Adkerson, left, CEO at Fereeport, McMoran Copper & Gold, got $35.3 million, while John Lungren, right, at Stanley Black & Decker, made $32.6million

Richer: Brian Roberts, CEO at Comcast, was awarded $31.1million - an increase of 14 per cent since 2009

They are already worth $6.3 billion, 68 per cent more than the companies thought they would be worth over the lifetime of the grants.



The AP used the Equilar data to analyze CEO pay packages at 334 companies in the S&P 500 that had filed statements with federal regulators through April 29.

Pay was analysed at companies that had the same CEO in both 2009 and 2010.



The analysis is the most comprehensive of 2010 compensation. Among the other findings, it found the highest-paid CEO in 2010 was Philippe Dauman of Viacom, the entertainment company that owns MTV, Nickelodeon and Paramount Pictures.

He received a pay package valued at $84.5 million, two-and-a-half times the figure he made the year before. He signed a contract in April 2010 that included stock and options valued by the company at $54.2 million when they were granted.

What recession? Robert Iger, left, of Walt Disney, made $28million, while Alan Mulally, right, of Ford Motor Co, racked up $26.5million

Six of the 10 best-paid CEOs came from media or entertainment, industries helped by a recovery in advertising and innovations in digital distribution.



Besides Mr Dauman, they are: Leslie Moonves of CBS, $56.9 million; David Zaslav of Discovery Communications, $42.6 million; Brian Roberts of Comcast, $31.1 million; Robert Iger of Walt Disney, $28 million; and Jeff Bewkes of Time Warner, $26.1 million.

The 10 highest-paid CEOs made $440 million in 2010, a third more than the top 10 made in 2009.



And finally...Jeffrey Bewkes, CEO at Time Warner, made $26.1million an increase of 35 per cent

Four CEOs – Messrs Dauman, Moonves, Roberts and Ray Irani of Occidental Petroleum – were on the Top 10 list both years.



To calculate CEO pay, AP added an executive's salary, bonuses, perks, any interest on deferred pay above market interest rates, and the value a company places on stock and stock options awarded during the year.



The median pay value of $9 million, calculated by Equilar, is the midpoint of the companies used in the analysis; half of the CEOs made more and half made less.



In 2007, the median pay was $8.4 million. In 2008 it was $7.6 million, and in 2009 it was $7.2 million.



The $9 million median for 2010 is the highest since the analysis began in 2006. The economy gradually improved in 2010, the first full year of recovery after the recession.

The private sector added 1.2 million jobs after losing 5 million in 2009. The unemployment rate fell from 9.9 per cent to 9.4 per cent. For companies analysed, revenue grew about 12 per cent, according to data provider CapitalIQ.



That helped lift earnings, as did companies' ability to hold down costs. Companies could limit raises for rank-and-file workers because of the weak labour market.



The bigger profits helped push up the typical cash bonus given to a CEO by 39 per cent in 2010, to $2 million, according to Equilar.



Some companies, including Ford and JPMorgan Chase, didn't grant bonuses in 2009 but paid big sums last year as business made a strong comeback from the recession.



The analysed companies granted their CEOs about $1.3 billion in stock in 2010, up about $300 million from the year before.



They awarded stock options worth $702 million, or about $27 million more than the year before. Those figures are based on formulas the companies use to estimate what the stock and options will eventually be worth when a CEO receives the stock or cashes in the options.

New York Stock Exchange at Wall Street: CEOs in the nation's largest companies raked in more money last year than they earned in 2007

Meanwhile, pay for workers grew three per cent in 2010, to an average of about $40,500.

The percentage increase was twice the rate of inflation, but the average wage was less than one-half of one per cent of what the typical CEO in the analysis made.



Some critics of today's executive pay say boards should consider how much a CEO has accumulated over the years when they set the next year's pay.



Jesse Brill, chairman of the website CompensationStandards.com and an expert on CEO pay, said: ‘Boards need to recognise that many CEOs already have enough in terms of motivation and lifetime wealth.

‘It is very frustrating to see boards keep giving them more.’



As evidence, Ms Brill points to stock and options given to CEOs the past two years. Boards at most companies grant those awards early in the year.



TOP 10 FAT CATS

Philippe Dauman, Viacom, $84.5 million (up 149 per cent from 2009) Ray Irani, Occidental Petroleum, $76.1 million (up 142 per cent) Leslie Moonves, CBS, $56.9 million (up 32 per cent) David Zaslav, Discovery Communications, $42.6 million (up 265 per cent) Richard Adkerson, Fereeport, McMoran Copper & Gold, $35.3 million (up 76 per cent) John Lungren, Stanley Black & Decker, $32.6 million (up 253 per cent) Brian Roberts, Comcast, $31.1 million (up 14 per cent) Robert Iger, Walt Disney, $28 million (up 30 per cent) Alan Mulally, Ford Motor, $26.5 million (up 48 per cent) Jeffrey Bewkes, Time Warner, $26.1 million (up 35 per cent)



In 2009, most were granted just as the stock market neared its lowest point in 12 years; today they are worth $2.2 billion more than the companies thought they would be over the lifetime of the grants.



Then in 2010, CEOs in the analysis received another batch of stock and options. Those have already gained about $400 million in value on paper, based on current market prices.



Doug Friske, an executive-compensation consultant at the firm Towers Watson, said: ‘The pendulum has swung back enough for many executives.

'Now boards are going to have to think about what they are going to do from here.’



Their decisions will be watched closely by shareholders. Government rules passed last year require almost every public company to give investors a vote at least once every three years on what it pays its executives.



The votes aren't binding, but they can draw unwanted attention to a CEO's pay.



So far this year, shareholders at only 12 companies have voted against pay plans. The low number reflects the fact that many institutional investors, such as mutual funds, tend to side with management on shareholder proposals.



One company whose shareholders voted against the pay plan was Stanley Black & Decker. In 2010, it gave CEO John Lundgren compensation valued at $32.6 million, which made him the sixth-highest-paid on AP's list.

His pay included a one-time grant of 325,000 shares of stock valued at $18.7 million.



Institutional Shareholder Services, which advises large investors on how to vote on corporate matters, had criticised Stanley Black & Decker for paying its executives better than competitors pay theirs and for its one-time stock awards.



Companies that get negative votes on their pay plans will have to disclose, in the statements they file with regulators the next year, how the vote affected their decisions on pay.

So in 2012, Stanley Black & Decker will have to say whether it changed Mr Lundgren's pay because of the negative vote.



Mark Borges, a principal at the compensation consulting firm Compensia, said: ‘They don't have to make any changes to their pay plans, but they have to disclose what they did to respond to the negative vote, which could be nothing.

Some companies are doing what they can to prevent an embarrassing no vote.



Last month, General Electric revised the terms on 2 million stock options granted to CEO Jeff Immelt in 2010. The changes came after GE was criticised by ISS.

Under the original terms of the grant, Mr Immelt, 55, simply had to stay at GE until 2013 to get half the stock options and until 2015 to get the other half.



Now, he can't exercise any of the options until 2015, and they depend on performance targets.



For mr Immelt to get half the options, GE has to improve its cash flow, and for him to get the other half, the stock has to outperform the market.



Mr Borges said: ‘Shareholders don't have any tools at the moment to force companies to make changes in pay, but there are plenty of companies making changes because they don't want the attention of a negative vote.'