The stock option juggernaut shows little signs of abating, as top executives from L.A.'s publicly held companies keep reaping tens of millions of dollars not based so much on salaries or even bonuses, but on the fortunes of Wall Street.

The Business Journal's annual executive compensation survey shows that stock options remain the coin of the realm in Corporate Los Angeles. While the base salaries of L.A.'s top executives rose by an average of 1.6 percent over last year, average total compensation was up 7.4 percent and the figure would have been even higher had 1996's results not been skewed by the 9-figure compensation of Disney chairman Michael Eisner.

"The bottom line is that out of the top 10 executives, 72 percent of their compensation comes from options," said Joshua Lurie, chief executive of Joint Information Inc., a New York-based compensation research firm that compiled the list of highest paid executives.

"That's a trend that you are going to see continue as compensation is increasingly tied to performance," he added.

Lurie said the increased weight of stock options as a percentage of total compensation is the direct result of demands from investors that executive pay be more closely tied to the health of the company.

And so with the economy booming, it's little surprise that executives like stockholders are profiting big time.

"Options continue to be the driving force behind the growth in executive compensation," said Kevin Murphy, a USC professor who sits on the National Association of Corporate Directors' committee on executive compensation.

"There certainly isn't anything short of a 4,000-point drop in the stock market that will reverse this trend," Murphy said.

SunAmerica Inc. Chairman Eli Broad is the highest paid executive, according to the Business Journal study, with total compensation of $47 million. Of that, $43.6 million came from options tied to his company's performance.

Broad ranked second in 1996 with $30 million in total compensation, of which $17.7 million was in options.

The big mover on the list was Mattel Inc. Chairman Jill Barad, who jumped from 33rd last year to No. 2 this year with $34.6 million 96 percent of that in options and other long-term incentive pay. By most measures, that makes her the highest-paid woman executive in the nation.

Noticeably absent from the top spots was Eisner, who fell to 14th place with $10.7 million a fraction of the $204.2 million he made in 1996 after exercising options on 7.3 million shares.


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