THE BUCKS AREN'T STOPPING.

• Author: Marshall, Jeffrey
• Position: Chief financial officer salaries - Statistical Data Included

CFO pay rose markedly last year on the strength of bonuses and options.

When it comes to compensation, public companies want their chief financial officers and other senior executives to take stock. That doesn't mean asking for a self-assessment: They want CFOs to receive much of their compensation in the form of stock options and other stock-based pay that builds over time and through incentives.

This isn't a new phenomenon, but research shows just how prevalent options and other non-cash incentives have become. At 51 very large corporations, averaging $22 billion in revenues, more than half of total CFO pay is now in the form of stock, according to New York compensation consultants Pearl Meyer & Partners. Pearl Meyer released its annual survey of those multinationals' pay practices this spring after an analysis of proxy statements covering pay in 2000.

Another survey by consulting firm Watson Wyatt Worldwide finds that among 1,545 companies ranging from small to very large, guidelines for stock ownership for the second-to fifth-ranking senior executives -- a group that ordinarily includes the CFO -- ranges from 2.8 to 3.1 times base salary. While that's lower than the 4.5 multiple given the CEO, it's slightly higher than the corresponding number in the 1999-2000 survey period.

Numbers from this year may eventually reflect the nation's ongoing economic malaise, but data from 2000 showed it was a bountiful year for top CFOs. According to Pearl Meyer data, total CFO pay at the largest companies shot up an average of 17 percent over 1999 levels, bringing their average total pay to a record $2.77 million. Stock option awards, which grew 25 percent to $1.41 million, for the first time comprised more than half of total remuneration.

As much as shareholder activists have railed against "excessive" compensation -- particularly pay packages laden with options that can send annual CEO compensation skyrocketing to eight and even nine figures -- the die has been cast. Compensation committees, cajoled by consultants and clued in to what competitors are doing, have been loath to let CEOs and other corporate brass fall behind in the pay race.

Watson Wyatt goes so far as to call the U.S. "the land of opportunity" when it comes to executive pay -- particularly for CEOs. Even at lower management levels, the firm says, the notion of linking outsized rewards to high performance has become ingrained. Its most recent survey, the firm says, "confirms our...