The board of the Bethesda health insurer awarded options to Wolf in June on 1 million shares of company stock "as a performance-based stock incentive to retain and incent Mr. Wolf to continue the success of the company and in anticipation of Mr. Wolf's becoming the chief executive officer," according to the company's filing with the SEC. Wolf and other company officials did not return phone calls seeking comment.
Wolf and former chief executive Allen F. Wise, who is now chairman, took over a troubled managed health care company in 1995. Coventry has built its business buying mid-size, often under-performing health plans in a number of states and turning them around, said Joseph D. France, who follows Coventry at Banc of America Securities.
"They are by far the best performer in managed care in recent years," France said. "They are very entrepreneurial. In terms of return that shareholders have enjoyed, their compensation stacks up well."
Coventry's shareholders have had a 174 percent return in the two years ended Dec. 31, according to Bloomberg News.
At Capitol One, Fairbank has been compensated almost wholly through options for a number of years, on the grounds that if the stock price declines and shareholders lose money, he won't receive a dime. So far, however, this strategy has worked to his benefit. Last year alone, he cashed in options with a net value to him of $56.5 million. All the options he exercised last year were about to expire; he had held on to them for nearly the life of their terms. A $1,000 investment in the credit card company's stock 10 years ago would be worth more than $10,000 today.
Friedman, Billings, Ramsey has earned more than $550 million in the past two years, and last year it was one of the most profitable investment banks in the nation as measured by return on equity. On Wall Street, that means big bonuses. FBR spokesman Bill Dixon said that bonus pay for senior executives is tied to earnings per share and that if FBR had lost money in 2004, the executives wouldn't have received any bonuses. FBR's chief executive salary, $480,000 last year, is substantially below average for most Wall Street firms and less than 126 other executive salaries in this year's local survey.
The 2004 bonus for Friedman was his last. He resigned in April after the SEC began investigating insider trading allegations against him. The company has offered $7.5 million to settle the allegations on its part, but the investigations into Friedman and two other former senior FBR executives are continuing.
Friedman's 2004 pay was granted before the insider trading investigation targeted him. He received no pension or severance payments when he left the company.
Michael D. Capellas, chief executive of MCI Inc., was paid $25.2 million last year, most of it as a reward for pulling the Ashburn-based telecommunications company out of bankruptcy. He received a $5 million bonus and $18 million worth of restricted stock.
Restricted stock is given to an executive but can be sold only after a number of years.
Jeffrey J. Steiner, chief executive of Fairchild Corp. in McLean, which sells aircraft parts and sports and leisure apparel, has long been among the highest paid of local executives. He had the highest salary in the Washington area in 2004, $2.5 million, but didn't receive a bonus. As a result, his total cash payment was down significantly from $7.8 million in 2003.
Putting some of the survey numbers in perspective:
Despite increased scrutiny of executive compensation after a series of corporate scandals, the executive suite at many companies remains a charmed place in which boards not only reward executives with rich salaries and bonuses but also help them with such routine expenses as commuting to work and preparing their taxes. 