Still, the most highly paid executives bore the brunt of this drop, as the compensation median actually rose 11.7% to $3.23 million in 2002. A sharp decline in options exercised, the largest single component of executive compensation, had much to do with the overall regression. Salary, which accounted for just 17% of all compensation, rose 3.6% to an average slightly over $1 million.
The 19 ad agency executives listed here saw their bonus pay, typically linked to financial performance, almost disappear. The seven executives from Omnicom Group and Interpublic Group of Cos. received no bonus in 2002. Stock options granted them were just as scarce, falling off 62%.
Declining stock prices have invited the ire and watchful eye of shareholders over compensation issues, prompting concessions such as the announcement in May that eight of Interpublic's executives relinquished over 1.2 million options. Major marketers are also considering measures to appease shareholders who are demanding moderation and more transparency in the wake of the rash of corporate accounting scandals. To see the full list of CEOs go to AdAge.com QwikFIND aap17u.
Salaries are unlikely to fall, but with bonus pay and options linked to financial performance, CEOs will have to lead their companies to strong results before there can be an overall return to the lavish pay days of the past.