As investor outrage over executive compensation rattled corporate boardrooms last year, some companies changed the way they set pay for their top officers. But the message apparently did not register on Wall Street, where chief executives like Sanford I. Weill of Citigroup and E. Stanley O'Neal of Merrill Lynch collected their biggest paychecks ever in 2003 - $44 million and $28 million.
Companies that reduced the pay of their chief executives despite healthy performances included MetLife, American Express and the MBNA Corporation. MBNA joined a trend by saying it would curtail the use of stock options. But at Bear Stearns, the big Wall Street investment bank, James E. Cayne received three times as much in stock options as he did the year before. Over all, Mr. Cayne received $27 million last year compared with $19.6 million in 2002.
On Wall Street, where executive compensation has always been closely tied to a firm's performance, the big pay packages of 2003 might be explained simply as the fruits of a robust year for the financial markets.
"I don't think there's been a huge philosophical change on Wall Street; they've always had a pay-for-performance mentality," said Alan Johnson, a pay consultant in New York. Though, he added, "We were surprised how high they've been."
Still, in the view of experts like Pearl Meyer, a compensation consultant, Wall Street is bucking the trend in many other industries, where a good year for the company does not necessarily translate into a rich payday for the chief. The credit card company American Express, for instance, paid Kenneth I. Chenault, its chief executive, 18 percent less last year than in 2002 - despite a 36 percent rise in its share price.
"What boards are saying is superb performance doesn't warrant excessive compensation," said Ms. Meyer, the chairwoman of Pearl Meyer & Partners in Manhattan.
In a survey of 50 of the biggest American corporations, her firm found that the cash and restricted stock given to chief executives rose 38 percent last year but that a sharp decline in the value of the options granted to them more than offset the increase. All told, she said, the average pay package for those 50 chief executives was 8 percent smaller than in 2002, although it still amounted to $10.3 million.
MetLife, the insurance company, said yesterday that it cut the total compensation of its chief executive, Robert Benmosche, by 10 percent, to $7.65 million. MBNA, the big credit-card company, said its senior executives would take a 44 percent cut in pay from 2002 to 2004 as it overhauled its compensation philosophy.
But Wall Street firms do not appear to have noticed the change in tune, even though their executives sat on the New York Stock Exchange board amid a storm over how much it paid Richard A. Grasso, the former chairman. Mr. Grasso was forced to resign after he took $140 million in pay and deferred compensation last summer. Some of the same executives who turned on Mr. Grasso before they, too, were removed from the exchange's board also took home large sums.
To be sure, there was a split among directors of the exchange over whether Mr. Grasso deserved the money he received, with some like Mr. Cayne defending him and others, like Henry M. Paulson Jr. of the Goldman, Sachs Group, campaigning against him.
There is no debate among them, though, about how they should be paid. On Wall Street, the constant mantra has been bigger profits, bigger bonuses. Investment banks traditionally pegged the amount they spent on employee compensation and benefits to be about half of their annual revenue, virtually without limit.
That approach leads to huge numbers when the financial markets are active and rising, as they were last year. The payouts can truly be staggering in the first year after a period of restructuring and layoffs.
For instance, Mr. O'Neal, who led Merrill to a record profit of $4 billion last year after presiding over the elimination of more than 20,000 jobs at the firm, received $14 million in cash, $11.2 million in stock and options valued at $2.8 million in 2003.
"There are a substantial number of companies where the top of the house is doing extremely well in part on the backs of those who have been outsourced, offshored, terminated or otherwise left out," said Brian Foley, a compensation consultant in White Plains. "There's been a silver lining for some and an empty envelope for others."
A Merrill spokesman said that the firm had not had a layoff since the middle of last year and had begun hiring again.
Still, Mr. O'Neal received slightly less than his predecessor, David H. Komansky, got at the end of the 1990's boom. Mr. Komansky, who retired last year, received $29 million in 1999 and $32 million in 2000.
Mr. O'Neal was far from the highest earner on Wall Street last year. The directors of Bear Stearns awarded Mr. Cayne options that they valued at $5.4 million, $10.4 million in stock and an $11 million bonus, according to the firm's proxy statement. He also received $12.3 million in gains on performance-based stock units, raising his total payout in 2003 to more than $39 million.
The Bear Stearns compensation committee, whose chairman is Carl D. Glickman, a 77-year-old private investor, attributed the large numbers to the firm's "strong absolute and relative performance." Based on the firm's high return on equity, the committee said in the proxy statement, it awarded $111 million to the firm's top six officers out of a maximum of $165 million that they could have received.
At Citigroup, the bonus pool for senior executives was even deeper. According to Citigroup's proxy statement, the firm's top six officers received $80 million out of a possible total of $243 million.
Citigroup, which also had a record profit last year, paid Mr. Weill $30 million in cash last year. Compensation consultants said they could not recall a larger cash payout to a corporate executive in history. Paul Hodgson, who analyzes executive pay at the Corporate Library in Portland, Me., said the closest figure in recent years was the $20.2 million in salary and bonus that Viacom paid its chairman, Sumner M. Redstone, in 2002.
Mr. Weill has had comparable payouts when all elements of his compensation are considered. In 2000, he received $18 million in cash and $8 million in stock.
The baseline amount for Wall Street chief executives appeared to be $20 million last year. That is how much J. P. Morgan Chase paid William B. Harrison and Goldman Sachs paid Mr. Paulson.
Mr. Paulson, who received more than $25 million in 1999, took all of his bonus in stock, none in cash, last year in a twist that passed for self-sacrifice on Wall Street and earned him praise from Goldman's directors.
"Hank Paulson's worked very hard to keep his compensation down," said William George, a former chairman of Medtronic who sits on Goldman's compensation committee. Executive pay remains quite high on Wall Street, Mr. George said, but at least it is tied to corporate performance and return to shareholders.
"That's a lot better than profits down, pay up," he said.