CEO Bonuses Fall 22% in 2009: Study

The chiefs of America's biggest companies are still getting big bonuses, it's just that they aren't as big as they were the year before.

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In a report to be released on Wednesday, the executive compensation firm Equilar looked at the proxies filed by 180 firms with revenue of more than $1 billion. The study found that in 2009 the median bonus payout fell 22 percent to $689,000 from $882,000 in 2008.

"I'm not surprised," said James Reda, president of the compensation consulting firm James F. Reda and Associates. "I think boards are more independent, and now pay is more likely to follow the performance of the company."

Reda says CEO pay is now more closely linked to a variety of measures such as the company's stock performance, cash flow, or earnings. If the CEO doesn't meet goals for each of those benchmarks, his or her pay reflects the underperformance.

Firms largely failed to reach the goals set out by their compensation committees in 2008, as reflected in the 28.4 percent decline in performance-based payouts, which account for 79.1 percent of all bonuses received by CEO. The median payout fell to $489,000 from $682,500 in 2008.

Discretionary cash payouts make up the remaining 20.1 percent of all bonuses. They also declined, falling by 12 percent to $616,300 from $700,000 in 2008.

Not all CEOs were paid equally in 2009. The CEOs of technology, financial and consumer firms saw their 2009 bonuses fall by more than 50 percent from from the year before, while payouts for the chief executives of basic material and capital goods firms falling 42 percent and 34 percent respectively.

Median bonuses increased in only two industries: CEOs of services firms saw their bonuses rise 20.8 percent, and the top execs of healthcare firms saw bonuses increase 14.7 percent.

Fewer CEOS were awarded bonuses last year overall. Only 73.9 percent of the studied 180 firms's CEOs received bonuses, down from the 82.2 percent who received them in 2008.

• Slideshow: Biggest Executive Bonuses of The Past Decade