CEO pay dives in a rough 2008

The board dangled the big bonus in front of Havner for the express purpose of completing such a deal, which gave Public Storage a $500 million cash war chest when other companies were struggling to get a loan, Teng said. The stock rose 12% in 2008, while the S&P 500 fell 38.5%.

Raises set before downturn

Of companies in the USA TODAY/AP analysis, the biggest salary in 2008 was $3.3 million paid to GE's Immelt, followed by $3.25 million to Steve Wynn of Wynn Resorts WYNN, and $2.8 million paid to Brian Roberts of Comcast CMCSA.

Compensation consultant Irv Becker of the Hay Group, whose job it is to help boards align executive compensation to performance, says salaries for 2008 were up from 2007 because raises were set in late 2007 and early 2008 before companies knew they were entering a recession and before the public outcry. However, decisions on bonuses were more likely made at year's end, which is why they fell 27% from a year earlier.

Due to the weak economy and the bailout money that went to the financial sector, "there's a whole level of conservatism," Becker says. He says 2009 salaries will be flat to down, and bonuses will be conservative.

About time, says Kazuo Inamori, the 77-year-old founder of Japanese conglomerate Kyocera. He says U.S. CEOs need to quit being paid as if they were solely responsible for company successes without regard to other employees and managers.

Andrew Goldstein, North American co-leader of executive compensation consulting at Watson Wyatt, says companies in general have taken note of the public outrage, and as of March, 55% had frozen executive salaries for 2009 — and 10% had reduced them. Back in December, just 21% had frozen salaries. But Goldstein says this was done mostly for image, because the savings are inconsequential to large companies.

Myrna Hellerman of Sibson Consulting says there have been some deep cuts to executive compensation in 2009, but there is already concern about talent retention, especially if the economy rebounds in 2010.

Goldstein says the dollar amount of stock options and grants is decreasing, but assuming a company's stock is down 50% and the dollar amount falls 20%, the number of shares granted in 2009 is much greater than in 2008. "Could there be a windfall? It's possible if stock prices recover … but it will only restore some of the value that evaporated," he says.

However, the brightest executives, who used to gravitate to Wall Street because of the high compensation, are now in abundant supply and are willing to work for what traditional companies can afford to pay, Goldstein says. "These are brilliant people. Where are they going to go? They will go into other areas of the economy. It's good for business."

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