(FORTUNE Magazine) – FROM THE DIN of the campaign trail to the cross fire at annual meetings, the issue of executive pay is stirring outrage and cries for reform. FORTUNE's survey of CEO pay at 200 of America's largest companies indicates that the galloping rise in salaries and bonuses slowed to a walk last year in the face of sagging profits. But CEOs are still making more than you think: Companies are stuffing pay packages with a less visible but highly lucrative form of compensation, stock options and other stock grants. Top executive pay may be shifting vehicles, but it's still climbing. FORTUNE's survey, prepared by Wyatt Co., a leading human resources and compensation consulting firm, examines pay differently from most surveys you've seen -- and in a way that yields important insight. The difference centers on those stock grants, the fastest-growing element of CEO pay. The common practice is to report the gain a CEO gets when he exercises options or when other grants become vested, adding it to salary, bonus, and other compensation to produce a total pay figure. But that approach is seriously flawed: It misses an enormous amount of pay because CEOs commonly wait to exercise most of their options until after they retire, when their pay is no longer reported in public documents. Our approach is to define pay as salary, bonus, and the estimated value of stock options and restricted stock granted in 1991. We also present long-term pay, mainly those reported values for gains on options exercised, in a separate column. The advantages are many: -- Valuing options when they're granted rather than when they're exercised means major components of pay don't escape public notice. -- This approach illuminates the most important trend in CEO pay, which the other surveys missed: the big increases in option grants. -- Richard Breeden, chairman of the Securities and Exchange Commission, has asked his chief accountant to investigate making companies value option grants much as this survey does and to report the results in proxy statements. Here you get to see what that information could look like. Placing a value on stock options when they're granted is speculative, to be sure. The executive may leave the company before the options become vested, in which case he forfeits them, and the stock price is hard to predict. Still, the risky but potentially spectacular gains on options give them tremendous value today. Using its own version of a widely employed economic model, Wyatt assigns the options a present value based on past performance of the company stock, dividends, and projected interest rates. The survey reveals the importance of options and of restricted stock, shares given outright to an executive on the condition he not sell them for a certain period, typically three to five years. Median salary and bonus for our sample stood at $1.2 million, a tiny increase over 1990, according to Wyatt. But newly granted stock options and restricted stock added another $1.2 million to median 1991 pay, lifting the total to $2.4 million. While we didn't compare option grants from this year with those from preceding years, it certainly appears that companies are piling on the options. Says Michael Halloran, the Wyatt consultant who supervised the survey: ''I'd estimate that the value of option grants rose at least 10% over 1990.'' The grants are especially lavish at the very top of the list. The 19 top-paid CEOs received a median of $8.8 million -- or nearly 86% of their median total 1991 compensation -- in stock grants. MOST OF THOSE highly paid CEOs won't hear many complaints from shareholders. The top five have performed brilliantly. America's highest-paid CEO, Roberto C. Goizueta of Coca-Cola, received $58.9 million of compensation last year, $56 million in the form of a million-share restricted stock grant; he can't sell the shares until 1996. That's one of the largest stock grants ever seen -- with the stock price up, its value has since risen to over $85 million -- but consider that Coke's total return to shareholders has averaged a stunning 35% a year over the past decade, 43% a year over the past four years. It's a similar story with Hamish Maxwell, Philip Morris's recently retired CEO. Even a $28.2 million farewell stock option grant is hard to argue with when you look at an average 35% annual total return to investors over the past decade. A couple of new CEOs received huge stock grants and have produced impressive results remarkably fast. Stanley Gault, former CEO of Rubbermaid, took over at Goodyear last June with the stock at 30; recently it was around 73. Lawrence Bossidy worked a similar transformation at Allied-Signal. The stock was at 33 when he quit as General Electric's vice chairman and took Allied's helm last summer; it was lately at 59. Merrill Lynch's stock nearly tripled last year -- and profits more than tripled -- under William Schreyer, who just retired as CEO. Look carefully and you'll see that two companies on this list share a single CEO, while two others have a pair each. Carl Lindner heads Penn Central (No. 133) as well as Chiquita Brands (No. 194). (A triple threat, he is also CEO of American Financial, not included here because it is privately held.) Lindner gets his big payoff from large holdings of company stock and is a bargain for the shareholders at Chiquita. He paid himself a modest $657,000 in 1991, when Chiquita's profits grew 37%. America's most famous co-CEO is Steven J. Ross of Time Warner (No. 43), who shared the title with N. J. Nicholas Jr. (No. 72) until February, when Nicholas was pushed out and Gerald Levin succeeded him. Ross received just over $4 million in salary and bonus last year, plus a nearly identical amount through an unusual arrangement. When Time bought Ross's former company, Warner, in 1990, it bought out his equity participation plans for $196 million. Ross got a widely publicized $78 million right away, with the rest going into a trust account to be invested and paid to him over eight years. $ Part of each year's payout represents the original money put into the account, and part represents investment earnings on the account. This second portion is tax deductible for Time Warner as compensation expense. Ross's contract stipulates that an amount equal to the tax benefit be paid to him. (Time Warner is the parent of FORTUNE's publisher.) The other paired CEOs on the list are the Sandlers, Marion (No. 173) and husband Herbert (No. 172), who have been running Golden West Financial for 28 years. Cohabiting CEOs are rare but perhaps worth more companies' consideration: Golden West has returned an average 33% a year to shareholders for a decade. Pressed by angry shareholders and politicians, the SEC is thinking of changing reporting requirements for executive pay. The commission may issue new guidelines this summer for presenting compensation data in annual proxy statements, such as requiring companies to compare trends in executive pay with corporate performance. The object is apparently to make fathoming CEO pay easier. ''Companies have favorite tricks that make compensation hard to comprehend, like lumping three years of grants together,'' says Halloran. ''New rules from the SEC could put an end to the gimmicks.'' The SEC has already started to give shareholders a voice in executive compensation. This year, for the first time, it has required companies to put shareholder proposals on executive pay to a vote. The results are nonbinding but could embarrass many companies. Proposals from small shareholders at four corporations -- including IBM and Bell Atlantic -- won a respectable percentage of the vote. Politicians from across the spectrum are seizing on the pay issue. Congress teems with proposals to push down executive pay. This year's numbers should fan the flames.

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