With all the scrutiny being given to bloated executive pay, a growing number of L.A.’s public companies are trying to tie their compensation programs to company performance.

That’s the conclusion of a new study by consulting firm BDO, which found changes in chief executive pay in 2009 tended to mirror stockholder returns.

“In L.A., it looks like CEO pay is in line with performance,” said Mike Conover, a senior director of the compensation and benefits practice at New York-based BDO.

“With all the time and attention that is being given to executive pay now, (directors) firmly believe there should be a connection between the pay of their CEO and the performance of the company’s stock.”

The study examined the compensation for chief executives at the 25 best- and worst-performing public companies, as measured by changes in stock price, in Los Angeles and nine other U.S. cities.

For the best L.A. companies, chief executive pay jumped 10 percent from the previous year, while the heads of the worst-performing companies still saw an increase, but it was a modest 2 percent.

That link has led to distinctly higher paydays for some executives, including Anworth Mortgage Asset Corp.’s Joseph Lloyd McAdams, who took home $4.7 million in 2009, a 17 percent increase. The real estate investment trust, which saw its stock rise 30 percent during the year, said in a Securities and Exchange Commission filing that a “substantial portion” of the top executives’ pay would be based on company performance “in order to further align their interests with those of our stockholders.”

“In essence, the companies that performed well are paying for it, if you will,” Conover said.

BDO did not release the names of the worst-performing public companies, but at least some publicly available data is supportive of the study. For example, Walt Disney Co.’s Robert Iger saw his 2009 pay fall 3 percent as the entertainment giant’s stock price dropped more than 6 percent during the fiscal year. The Burbank company actually changed its bonus policy during the year to put greater emphasis on earnings per share.

Conover said the correlation between pay and performance was greater in 2009 than in previous years, which he said was a function of the public outrage over executive pay that has forced boards to justify big bonuses.

Still, L.A. companies doled out larger pay increases than companies elsewhere, according to the study. L.A.’s shareholder gains were lower than those in other cities, yet local CEO paychecks rose nearly twice as much as the national average.

The best-performing L.A. companies studied saw average shareholder returns of 58 percent, the lowest of the 10 cities. Yet, the pay increases averaged 10 percent, equivalent to New York, the best-performing city, where shareholder returns averaged 243 percent.

Among the top companies raising the average compensation was Occidental Petroleum Corp., the Westwood oil and gas giant. It has come under severe criticism from shareholders over the pay of Chief Executive Ray Irani, whose pay decreased in 2009 but still totaled $31 million – and more than $500 million over the past decade. (See article page 1.)

Occidental spokesman Richard Kline defended Irani’s pay, pointing out that 92 percent of his compensation was tied to various financial and stock metrics.

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