CEO pay up big - but not performance
New report shows 8 of 12 companies with highest paid CEOs lagged their peers.
By Jeanne Sahadi, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- CEOs got another nice pay raise in 2005, according to a new report from a corporate watchdog group released Wednesday.

The Corporate Library analyzed the compensation of nearly 1,400 chiefs for its annual report on CEO pay. The group's median total compensation rose 16 percent between 2004 and 2005. A year earlier, CEOs got a bump of 30 percent in total compensation, which includes salary, bonus, perks, exercised stock options and other long-term incentive pay.

12 Most Highly Paid CEOs in 2005
CEO Company Total Compensation
Barry Diller IAC/InterActive $295M
Richard D. Fairbank Capital One Financial $249M
Eugene M. Isenberg Nabors Industries $203M
Terry S. Semel Yahoo! $183M
Bruce E. Karatz KB Home $156M
Angelo R. Mozilo Countrywide Financial $142M
Henry R. Silverman Cendant $140M
Michael S. Jeffries Abercrombie & Fitch $114M
Richard S. Fuld Lehman Brothers Holdings $104M
William E. Greehey (former CEO) Valero Energy $95M
Ray R. Irani Occidental Petroleum $87M
Carol A. Bartz Autodesk $83M
Source:The Corporate Library

Not surprisingly, the top dogs in the S&P 500 companies brought in the most. Their median total compensation was roughly $7 million. Of that, their median base salary was just a hair shy of $1 million.

In the 12 companies with the most highly paid CEOs, the pay-for-performance link is hard to find in eight of them, given that they have underperformed their peer group even as their CEOs banked somewhere between $83 million and $295 million in fiscal year 2005 alone.

The 12 most highly paid CEOs last year hailed from IAC/InterActive Corp. (Charts), Capital One (Charts), Nabors Industries (Charts), Yahoo! (Charts), KB Home (Charts), Countrywide Financial (Charts), Cendant (now known as Avis Budget Group (Charts)), Abercrombie & Fitch (Charts), Lehman Brothers (Charts), Valero Energy (Charts), Occidental Petroleum (Charts) and Autodesk (Charts). (See table.)

But of those, only four companies -- Autodesk, Yahoo!, Valero Energy and Countrywide -- outperformed their peers in the past five years. Occidental came close to doing so, but not the rest.

And in fact, two companies, IAC/Interactive and Cendant, created a negative total shareholder return, which factors in reinvested dividends.

Had the underperforming CEOs' stock options been linked to an index of their company peers' performance rather than to the stock's market price, Hodgson writes, "their option profits that ran into millions of dollars would have been wiped out altogether."

On an individual basis, there were a number of drastic upswings and even some sizeable downturns in CEO compensation.

The most dramatic was at Marvell Technology. The pay bump for CEO Sehat Sutardja: 14,000 percent. That's thanks to a $75 million profit in exercised stock options. But, Hodgson notes, even though the company's stock has done stunningly well (rising 230 percent in five years), the company is under investigation for possibly backdating stock options.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.