Many Executives' Paychecks Swelled, No Matter How They Did

"I look at it as having been earned over five years," Royster said of the retention bonus.

Similarly, his $7 million retention bonus in 2010 is tied to a $7 million interest-bearing loan the company made him in 2000 to purchase stock in Radio One.

General Dynamics Corp. chief executive Nicholas D. Chabraja, whose cash pay increased 19 percent since 2003, to $4.3 million, signed a 2004 employment agreement that looks forward to retirement. In addition to guaranteeing him a "minimum" annual salary of $1.25 million until he retires, the Falls Church defense and aeronautics company agreed to give him 500 hours of flight time in a company-owned jet for 10 years after retirement, buy his Virginia home, pay his moving expenses, and provide an office and secretary for his personal use. He will get all this regardless of how General Dynamics performs. The company had a three-year shareholder return of 50.6 percent through 2005.

When ranking cash pay increases, executives at financial services companies tend to be at both the top and bottom of the range. In general, executives in that industry -- including banks, investment banks, credit card companies and in some cases real estate investment companies -- are judged by how much money they make for shareholders. When such a company has a good year, executive pay soars. If profit drops, so does pay.

At Arlington investment bank Friedman, Billings, Ramsey Group Inc., chief executive Eric F. Billings made less than many of the people who work for him in 2005, because huge losses in the firm's mortgage investment portfolio last year led to a $171 million loss for the company overall.

Billings earned the same annual salary of $480,000 from 2003 to 2005. But after receiving more than $18 million in bonuses in 2003 and 2004, he didn't receive a bonus in 2005. FBR's board did award Billings 125,000 shares of restricted stock in July 2005, which at the time was worth $1.6 million.

At business lender CapitalSource Inc., chief executive John K. Delaney went without a bonus in 2005, after receiving a total of $4.2 million from the previous two years. Last month Delaney signed a new five-year employment agreement that requires the company to grant him $100,000 a quarter in restricted stock in lieu of a salary. It also grants him options on 7 million shares that, assuming the stock appreciates at 5 percent over the next 10 years, will be worth more than $104 million. In addition, Delaney, a major shareholder in CapitalSource, received more than $18 million in dividends earlier this year.

Then there's the "because we like him" method of executive pay. Burton J. Reiner, the president for 35 years of real estate company Bresler & Reiner Inc., retired in March 2005.

The company's board granted him a one-time cash payout of $1 million "in recognition of his service to the company."

"This was a supplemental payment for Burt Reiner's 30-plus years of service with the public company and its predecessor," said chief executive and president Sidney M. Bresler.

Also, the company will pay the 77-year-old Reiner and his wife full medical, dental and vision benefits for the rest of their lives, a cost the company estimated at $330,000. From 2001 until his retirement, Reiner was paid more than $1.9 million in cash as president, not including the $1 million special payment.

At Allied, Walton cites several reasons for why his big raises in the past two years are not exorbitant, most of which are echoed by Allied's board in its annual proxy.

Allied is a lender to and investor in mid-size companies. In the three-year period ended Dec. 31, Allied's return to shareholders -- the increase in the price of Allied's stock plus its hefty dividend payments -- has been 75 percent. The realized gains on its investments last year were $273.5 million. Much of that was attributable to the strategic decision to sell its large real estate loan portfolio for a gain of $216 million.

Walton said that, relative to his peers in the financial services industry, he's not overpaid. He said New York investment bank Goldman Sachs Group Inc. pays its employees on average about $521,000 a year. Allied pays $598,000, "but our returns are better." He also said that were Allied a private partnership managing investors' money, much like a private equity firm, his take of Allied's gains in the past three years would be much higher than his current compensation.

"Mind you, I'm not complaining," he said. "I'm well paid. But you only earn that much if you produce results."

Database editor Derek Willis contributed to this report.