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Correction to This Article

A chart in the Aug. 16 Washington Business section included incorrect five-year stock returns for two companies. SLM Corp.'s total return over five years was a gain of 150.7 percent, not a loss of 10.8 percent. Coventry Health Care Inc. had a 49 percent gain, not a 23.4 percent loss.

An Aug. 16 Business article on executive compensation in the Washington area incorrectly reported that BearingPoint Inc. had no executive on a list of the area's 100 most highly compensated public company executives. Randolph C. Blazer, chairman and chief executive of BearingPoint, was ranked 72nd in total compensation.

Compensation Report

The Region's Highest-Paid Executives

Salaries, Bonuses Increased in 2003 After 2 Down Years

By David S. Hilzenrath
Washington Post Staff Writer
Monday, August 16, 2004; Page E01

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.

_____Compensation Report_____
Pay for XM Executives Modest as Stock Recovered (The Washington Post, Aug 16, 2004)
Lucrative Cash Package Came as Fairchild Reported $53.2 Million Loss (The Washington Post, Aug 16, 2004)
Board Members, Executives and Family Members Can Still Benefit (The Washington Post, Aug 16, 2004)
Expense Issue Draws Mixed Views From Companies (The Washington Post, Aug 16, 2004)
Survey Estimates Values of Options, Excludes Exercises (The Washington Post, Aug 16, 2004)
_____Charts_____
Top Compensation Packages
Top Salaries
Superlatives
Trends
_____Industries_____
Aerospace
Biotechnology
Information Technology
Telecommunications
_____Live Discussion_____
Transcript: Washington Post staff writer David Hilzenrath and editor Mike Flagg were online to discuss the 2004 executive compensation survey.
_____Multimedia_____
Audio: Washington Post reporter David Hilzenrath discussed executive compensation on WTOP.
_____Local Executive Pay_____
Chart of Highest Paid Executives
Chart of Cash Compensation
How Washington's Corporate Elite Stacks Up (The Washington Post, Jul 16, 2001)
Compensation Glossary
The Methodology
Stock Options No Longer Guaranteed Windfalls for CEOs (The Washington Post, Jul 16, 2001)
CEOs Do All Right, But for Real Money Look to the Stars (The Washington Post, Jul 16, 2001)
Tech Exec Compensation Climbs (Washington Techway, 7/16/01)

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.


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