CEO pay dives in a rough 2008

However, Chenault was issued 1,196,888 stock options in January 2009 at a strike price of $16.71, says company spokeswoman Joanna Lambert. Stock options allow you to buy a stock at a set price during a set period of time. Any gain in the stock from that set price produces a profit when the option is exercised.

For Chenault, that means his paper wealth rises nearly $1.2 million for every $1 the stock price rises above $16.71. With the stock now at $25.22, those options are already in the money by $10.2 million, and if the stock recovers to the $49.13 level of last year, they will be worth nearly $39 million.

That's a good example of the significant gains many CEOs will see when stocks rebound, says Jay Fishman, CEO of Travelers TRV. "Some of these grants could end up being worth substantial sums one day. I hope so, not for my sake, but because it means the economy has gotten better."

CEOs have recovered quickly from bad patches before, says Sarah Anderson of the Institute for Policy Studies, a liberal think tank. In 2001, the average total CEO compensation was $11 million, but the bursting of the dot-com bubble and recession dropped that to an average $7.4 million in 2002 and $8.1 million in 2003. By 2004, it was back to $11.8 million, Anderson says.

Cisco Systems' CSCO John Chambers had stock options worth $1 billion in 2000, but they were driven underwater when Cisco's stock price fell from $77 a share in March 2000 to about $11 a share by September 2002. Chambers was granted 14 million more options between 2001 and 2003. By 2004, they were valued at $224 million, Anderson says.

Some take no salary at all

With the economy weighing heavily, six CEOs took either no salary or $1 in 2008, including Apple's AAPL Steve Jobs, Google's GOOG Eric Schmidt and Whole Foods' WFMI John Mackey. And companies overall were less generous with bonuses. Seventy-nine CEOs, including Ford Motor's F Alan Mulally, General Electric's GE Jeffrey Immelt and Aflac's AFL Dan Amos, received no bonus. Among those with the same CEO in 2008 and 2007, 56% received a smaller bonus in 2008 than in 2007.

"Less earnings, less compensation. It just makes all the sense in the world to me," Fishman says. CEO compensation watchdog Graef Crystal points out that given the financial toll waged on their investors in 2008, even more CEOs should have "been sent to bed" without bonuses.

Among CEOs who did get them, the seventh-highest bonus, at $11.7 million, went to Martin Orlowsky of cigarette maker Lorillard LO. It was more than 10 times what he received in 2007 because his contract was about to expire, and a bonus was paid to retain him, Lorillard spokeswoman Hannah Sloane says.

Lorillard was spun off from Loews in June 2008. By the end of the year, its stock had fallen 26.6% from its first-day close, vs. a 33.5% drop for the S&P for the same period.

Ronald Havner, CEO of Public Storage PSA, a real estate investment trust, received $16 million in bonus and incentive cash in 2008, vs. less than $1 million in 2007. Clem Teng, vice president of investor relations for Public Storage, said Havner received a one-time bonus of $6.3 million for engineering a 51% sale of subsidiary Shurgard Europe that gave the company a $350 million gain in times when such deals were extremely difficult.

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