New England CEO pay $oars
By John Strahinich
Saturday, May 14, 2005

The CEOs of New England's 100 biggest public companies scored a staggering 45 percent average pay raise last year - more than twice the return they gave to their shareholders, a new survey shows.
     The region's top chief executives were paid an average of more than $4.9 million in total compensation in 2004, up from $3.4 million the year before, according to pay experts DolmatConnell and Partners Inc. in Newton.
     By contrast, the survey showed shareholders of these companies saw an average 20 percent return.
     ``Performance was certainly strong for these companies,'' said Jack Dolmat-Connell, who did the survey. ``But when CEO compensation goes up 45 percent, it says we have a way to go before we get to true pay-for-performance.
     ``Move the decimal point over by one and you get what everybody else is getting for a raise,'' Dolmat-Connell added.
     Topping the list of CEOs who got the most but returned the least was Teradyne Inc.'s Michael A. Bradley. His pay shot up 419 percent, from $1.6 million to $8.4 million, even as his shareholders saw a 33 percent loss.
     Next came Brooks Automation Inc.'s Edward C. Grady. He got a whopping 680 percent raise, from $428,000 to $3.3 million, even though the Chelmford company's shareholders saw a 32 percent loss.
     On average, base salaries for the region's top 100 CEOs rose 8.5 percent, to $750,000 from $691,000.
      But at the same time, their bonuses shot up more than 31 percent, to $887,000 from $675,000.
     The survey also uncovered another trend: an 8 percent drop in the number of companies that give CEOs stock options, but a 13 percent rise in firms providing restricted stock.
     Dolmat-Connell said CEOs benefit from stock options only if they can boost share prices, whereas executives can cash out time-vested restricted stock even if stock prices drop.
     ``The world is moving rapidly to restricted stock,'' said Dolmat-Connell. ``The bad news is, (restricted shares) are not good from a shareholder perspective because they're not a pay-for-performance vehicle.''

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