For many U.S. chief executives, bonuses bounced back last year at a speedy clip.
CEO bonuses at 50 major corporations jumped a median of 30.5%, the biggest gain in at least three years, according to a study of the first batch of corporate CEO pay disclosures by consulting firm Hay Group for The Wall Street Journal.
Top executives collect a lot of different types of pay, including salaries, long-term equity awards and bonuses tied to corporate performance. Bonuses in general are rebounding as some hard-hit industries like autos recover and corporate profits climb.
Under the new financial-overhaul law that took effect this year, every business whose stock-market value exceeds $75 million must let investors voice their views on rewards for the top brass at annual meetings.
Jacobs Engineering Group Inc. and Beazer Homes USA Inc. have already gotten a thumbs down from investors. Five others won support from less than 70% of the votes, according to Institutional Shareholder Services, which advises big investors like mutual funds and pension funds.
Hay Group reviewed proxy statements filed since Oct. 1 by companies with at least $4 billion in annual revenue. The 50 CEOs in the sample collected a total of $126.1 million in 2010 bonuses, up from about $83 million a year earlier.
Big winners included the chiefs of Starbucks Corp., Jabil Circuit Inc. and Clorox Co.
One of the big bonuses landed in the wallet of Robert A. Iger, leader of Walt Disney Co. He earned $13.5 million for the year ended Oct. 2. That represents a 45.4% increase. Total shareholder return "was up nearly 24%-substantially more than the 14% return delivered during the same period by the S&P 500,'' said Zenia Mucha, a Disney spokeswoman.
The measure of shareholder return includes gains in the stock price along with reinvested dividends.
Corporate directors said the sharp upturn was a sign of improved profits. Net income at the 50 companies increased a median of 19.4%.
Boards use a variety of other measures, too, to decide the size of a CEO's annual bonus. Besides profit, other financial targets include return on equity, cash flow and return on invested capital. Corporate leaders also often see a portion of their bonus tied to nonfinancial measures such as safety, leadership and succession planning.
Jeffrey Immelt, the chief executive of General Electric Co., picked up a $4 million cash bonus for 2010 after skipping payments the previous two years, when profit dropped.
Top bosses at Oshkosh Corp., Navistar International Corp. and Johnson Controls Inc. got higher bonuses as their companies recovered along with the auto industry.
Oshkosh's Robert G. Bohn collected a $2.4 million bonus in the year ended Sept. 30, up from $527,813 the prior year at the maker of specialty vehicles and other products. The company said the bonus was mainly based on gains in operating income.
Daniel Ustian, Navistar's chief, got a $1.95 million one-time bonus for developing a business model "that kept the company profitable in the midst of the worst truck market in 50 years,'' said Roy Wiley, a spokesman for the commercial truck maker. The special award was in addition to a regular $1.95 million bonus.
At Starbucks, Chief Executive Howard Schultz pocketed a $3.5 million bonus for the year ended Oct. 3. The bonus, his biggest ever, far surpassed the $1 million the coffee giant bestowed the year before.
The higher reward reflected the company's performance last fiscal year, said Alan Hilowitz, a spokesman. Starbucks recently turned around sales after the toughest stretch in its 40 years. The company's profit more than doubled to record levels. Starbucks's directors set tough bonus goals "tied to a very challenging fiscal 2010 annual operating plan," Mr. Hilowitz said.
Starbucks investors also got richer, with gains in the stock plus reinvested dividends up 24.9% last year, according to Hay Group. Proxy adviser ISS recommends investors vote "yes" on the company's pay practices at the March 23 annual meeting.
Jabil Circuit gave CEO Timothy L. Main a $2.9 million bonus for its year ended Aug. 31, more than five times his $524,103 award the prior year. The board's pay panel chose possible bonus targets that it "believed were challenging yet attainable in an uncertain economic environment,'' said Adam Berry, director of investor relations for the maker of circuit boards and electronic components.
The award was based on higher core operating income and return on invested capital. Jabil Circuit posted profit of $169 million last year, swinging from a loss of $1.2 million the year before.
But the company's investors didn't fare as well. Total shareholder return in each of the past three years "was low relative to that of the S&P 500,'' the company said in its proxy statement.
Shareholder returns were -4.3% in the year ended Aug. 31, compared with 10.9% for the S&P 500 Index, according to Hay Group. Poor returns forced Mr. Main to forfeit most of his performance-based restricted shares.
Clorox was generous with its bonus even though it has hit a tough stretch lately. CEO Donald R. Knauss collected a $1.97 million bonus for the year ended June 30, representing a 53% gain. Profit advanced 12.29% during fiscal 2010.
Dan Staublin, a Clorox spokesman, said, "It's important to look at our total CEO compensation package, which fully aligns with shareholder interest.'' Last month, billionaire investor Carl Icahn disclosed a 9.08% stake, saying Clorox is undervalued.
Not every big business boss is rolling in bonus dough, the Hay analysis showed. Whirlpool Corp. CEO Jeff M. Fettig saw his cash bonus tumble 49% to about $1.8 million from $3.5 million in 2009, even as 2010 earnings jumped 89% from a year earlier to $619 million.
The home-appliance maker is caught in a vicious spin cycle of rising expenses and intensified pressure from Korean rivals. The competition, especially in the U.S., makes it harder for Whirlpool to pass along higher raw material prices to consumers.
Monsanto Co.'s Hugh Grant didn't collect a penny for the year ended Aug. 31, because the agricultural-products giant missed key financial goals. His fiscal 2009 bonus totaled $1.1 million. Even so, 34% of voting shares opposed Monsanto's executive pay packages at its Jan. 25 annual meeting.
Mr. Grant's total direct compensation climbed 17.4% in fiscal 2010, while shareholder return fell 36%, according to Hay. Monsanto directors are now discussing the large minority vote with investors so they can understand why shareholders "voted the way they did," said Kelli Powers, a spokeswoman.