Executives of American International Group Inc., the New York financial services conglomerate at the center of the country's economic storm, have been publicly scolded and even had their lives threatened over recent million-dollar bonuses.
The environment for local executives has not been quite so unforgiving, because with so many corporations losing money and getting pummeled in the stock market, paychecks for local executives took some considerable hits in 2008.
For the second consecutive year, cumulative pay for the top executives at Los Angeles County's 50 largest public companies declined, falling by $5 million to barely top $400 million. More than half of the 20 highest earning chief executives in the county took home less in 2008 than they did the prior year.
Even the executive atop the Business Journal's list, Occidental Petroleum Corp. Chairman and Chief Executive Ray R. Irani, saw his pay decline by more than 20 percent though at $60.5 million it was still nearly double the second-highest paid executive, Walt Disney Co.'s Robert Iger. Other big names, such as Patrick Soon-Shiong and Jeffrey Katzenberg, also earned less.
"The governance environment for executive pay has never been more difficult for companies to manage," said David Wise, a senior consultant for Hay Group, a global management consulting firm that tracks executive compensation.
Using publicly available data culled from companies' regulatory filings, the Business Journal analyzed the 2008 pay for the heads of the county's 50 largest public companies by market capitalization. The executives were ranked by total company compensation, which includes salary, bonuses, stock and option grants, and any additional perks such as country club dues.
The rankings reflected a year in which widespread financial strife left virtually no companies unharmed, and populist outrage over seemingly extravagant pay packages for top executives boiled over.
As a result, boards are increasingly re-examining executive compensation packages and trending toward performance-based pay.
"This stuff is under the magnifying glass more than ever and companies are changing their programs to respond to the environment," Wise said. "We saw declines in 2008, and we may see it again in 2009."
Pay for performance
Irani, who topped the list for the fourth consecutive year, earned $60.5 million in 2008, a $17 million decline from the previous year. His base salary remained unchanged at $1.3 million; most of the decline came in option awards.
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