Public-company proxy statements have begun filing in, and it's no surprise that executive pay is going up.

The average chief executive of a major U.S. company received $10 million in total compensation in 2004, up 9 percent from 2003, according to compensation consultant Pearl Meyer & Partners.

Bruce Karatz, chairman and chief executive of homebuilder KB Home, the giant homebuilder, received $23.9 million in total compensation last year, including salary, bonus, restricted stock awards and other short- and long-term compensation a 30 percent jump from 2003. (Karatz also cashed in $26 million in previously granted stock options and received 280,000 stock option grants.)

"With profits growing 30 percent companywide for the fiscal year, the CEOs' compensation mirrors that success," said Derrick Hall, a spokesman for KB Home.

Ray Irani, chairman and chief executive of Occidental Petroleum Corp., took home $30.9 million total compensation, a 23 percent increase from 2003. Irani also cashed in 1.2 million in stock options, reaping another $37.2 million bringing his total haul to $68.1 million.

In Los Angeles, fewer than 10 percent of the publicly held companies that make up the LABJ 200 Stock Index had filed their 2004 proxies as of last week.

While the numbers never seem to astonish, there are signs that after years of public outcry over accounting scandals, public trials and legal battles between compensation committees against former chief executives, compensation is beginning to align better with shareholders' returns.

"This process is really evolving in the post-Sarbanes-Oxley, post-Dick Grasso, post-Jack Welch environment," said Jannice Koors, managing director at Pearl Meyer. "We are seeing the results of a financial performance rebound in 2004."

The use of stock options, for example, has finally been curbed after accounting changes that favor the use of restricted stock awards that are easier for shareholders to quantify.

And last year, the stock market rebounded with a 9.3 percent increase in the Standard & Poor's 500 Index of large public-company stocks rose 9.3 percent the same average increase of pay packages.

"The strategy now is to draw the line on salaries and shift to stock awards based on performance," said Mark Poerio, an attorney at Paul Hastings Janofsky & Walker, who counsels top executives on employment agreements.

At both KB Home and Occidental, for instance, the share prices have skyrocketed, giving executives a rationale to show that their pay was tied to performance.

But a booming real estate market was a large factor in the 50 percent increase in KB Home's stock price last year, and higher oil prices were a well-documented and arguably dominant reason for Occidental Petroleum 42 percent share price increase.

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