Now that the market is beginning to recover, we were curious to see the impact of the new financial landscape on how CEOs are paid. Our 2010 CEO Pay Strategies report, released today, shows an interesting mix for S&P 500 CEOs in FY 2009: median total pay is down, mostly due to decreased option values, but bonuses are soaring, particularly for those whose companies performed well amidst the recession.

The report examines 342 companies in the S&P 500 whose fiscal years ended between June 30, 2009, and January 31, 2010. All the companies in the analysis have had CEOs in place for at least two years, to avoid influence from new-hire awards. Here are a few of our findings:

• Median total compensation declines: Median S&P 500 CEO compensation fell for the second year, decreasing 7.9 percent from 2008 to 2009. The median CEO’s pay was $7.5 million in 2009, compared to $8.2 million in 2008.
• Bonuses increased in size and prevalence: Bonus payouts surged from a median of $1.38 million in 2008 to a median of $1.5 million in 2009, an 8.5 percent increase. Only 14.6 percent of CEOs received no bonus this year, compared to 18.4 percent last year.
• Bonuses were found to be responsive to performance: CEOs in the top-performing quartile of companies had a median bonus increase of 86.8 percent from 2008 to 2009, while those in the bottom quartile saw a median bonus decrease of 10.4 percent.
• The most recent filers gave out bigger bonuses: Companies with fiscal years ending from June to November 2009 paid a lower median annual bonus than those with fiscal years ending in December 2009 and January 2010, demonstrating the impact of the market rebound.
• Healthcare CEOs made the most: Healthcare CEOs had the highest median total pay, at $10.5 million in 2009. The Services and Utilities industries saw the greatest pay growth, with increases of 9.8 and 5.6 percent, respectively, from 2008 to 2009.
• Equity continues to constitute a majority of the pay package: Overall pay-package design remained stable in 2009. Equity awards continued to constitute the largest portion of total pay, at over 60 percent.
• Equity awards slide in value: The decline in median total pay was primarily attributable to equity awards, whose value declined 17.7 percent for options and 0.6 percent for stock. Options remained the most common equity vehicle, with 71.9 percent of CEOs receiving them as part of the pay package, but more companies are granting only restricted stock, and fewer companies awarded options in 2009 compared to 2008.
• Early ‘09 awards bounce back big, thanks to market timing: Options granted in early 2009, when markets were at record lows, were frequently increased in size to compensate for decreased value. These options are seeing major gains in intrinsic value as the market has recovered. 68.4 percent of options granted in 2008, however, remain underwater.

The full 20-page report is loaded with interesting information, charts, and our predictions for the big trends you’ll see in pay as 2010 progresses. To request it, click here.

We’ll also be doing a webinar on CEO Pay Strategies on May 19th. Mark your calendars, and stay tuned for more information on how to sign up.