Pay for the Washington area's top executives rose significantly last year, reversing the downward trend that set in with the recession in 2001.
The median salary and bonus for the 100 highest-paid executives rose 15 percent to almost $1.5 million in 2003 after declining by half in 2002 and 19 percent in 2001, according to a Washington Post survey.
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Top Compensation Packages
Transcript: Washington Post staff writer David Hilzenrath and editor Mike Flagg were online to discuss the 2004 executive compensation survey.
Audio: Washington Post reporter David Hilzenrath discussed executive compensation on WTOP.
The estimated value of the typical stock option grant rose by a third to $2.8 million after declining by 41 percent in 2002 and 20 percent in 2001, the survey found.
Nationally, some indicators of pay for top executives rose too. A study by Mercer Human Resource Consulting of 350 of the largest U.S. firms found that the median salary and bonus for chief executives rose 7.2 percent to $2.1 million. But the median salary, bonus and long-term compensation for chief executives, including options, fell 4 percent to $6.2 million.
The local increases came as company earnings increased significantly. The median profit for public companies in the Washington area nearly tripled in 2003 and increased by more than six times in 2002.
But both cash and stock option compensation remained far short of their levels in 2000, when the stock market peaked and the dot-com bubble burst. The median cash compensation -- salary plus bonus -- last year was less than half the $3.2 million median in 2000 for the 100 highest-paid executives. The median option grant, valued by assuming 5 percent growth in the exercise price compounded over the life of the option, was down almost $1.7 million from the $4.5 million median at the market's height.
Still, compared to the average wage earner, Washington's top executives did very well. Wages for U.S. workers in private industry rose only 2.9 percent last year, to a full-time national average of $40,745, according to the Bureau of Economic Analysis.
Some of the biggest earners in the Washington area presided over soaring stock prices and profits, while others were rewarded despite lackluster results.
That is still the case nationwide, too, experts said. "Despite the substantial pressure on companies to change, and despite the widespread recognition that things should change, there has been far too little change in the compensation landscape," said Lucian A. Bebchuk, director of Harvard Law School's program on corporate governance.
For the second year in a row, the top two executives at the Arlington-based investment bank Friedman, Billings, Ramsey Group Inc. -- Emanuel J. Friedman and Eric F. Billings -- led the list in total cash received with almost $9.5 million each.