Total S&P 500 CEO Pay Takes Market Hit, But Bonuses Rise

The Equilar CEO Pay Strategies report, based on 342 companies in the S&P 500, is out today, and regardless of whether you side with the CEOs or the shareholders, it’s a bit of a mixed bag. Median CEO pay declined for the second year in 2009, sliding 7.9% to a median of $7.5 million, but most of that is attributable to the decreased value of equity awards (options are down 17.7%, while stock is down 0.6%). A majority of 2008 awards remain underwater. The lucky CEOs who received their award grants in early 2009, however, have made out very well: their awards, given near the market bottom and often inflated in size to make up for price decreases, have made big gains in intrinsic value.

Since “pay,”  ”for,” and “performance” are the three biggest words in Washington right now, we were interested to see the report’s analysis of CEO bonuses based on company performance, which divided the 342 companies into quartiles. CEOs in the top-performing quartile got plenty of bonus love, to the tune of 86.8% increases in their bonus pay, but those in the bottom quartile saw declines of only 10.4% in their bonus payments– can you hear the cries of “what’s the downside” from here?

Thanks to these top performers, overall bonus pay was up 8.5% from 2008, with a median payout of $1.5 million. The percentage of CEOs receiving no bonus at all also decreased, from 18.4% in 2008 to 14.6% in 2009. One sign of the market rebound: the later a company filed, the higher their bonus payment was likely to be; the latest group of filers, in December ’09 and January ’10, saw their bonuses jump 13.3% year-over-year. If the “performance” in “pay for performance” referred to the overall market instead of the individual company, SEC utopia would be imminent.