Profits at big U.S. companies broke records last year, and so did pay for CEOs.
The head of a typical public company made $9.6 million in 2011, according to an analysis by the Associated Press using data from Equilar, an executive pay research firm.
That was up more than 6 percent from the previous year, and it is the second year in a row of increases. The figure is also the highest since the AP began tracking executive compensation in 2006.
Companies trimmed cash bonuses but handed out more in stock awards. For shareholder activists who have long decried CEO pay as exorbitant, that was a victory of sorts.
That's because the stock awards are being tied more often to company performance. In those instances, CEOs can't cash in the shares right away: They have to meet goals first, such as boosting profit to a certain level.
The idea is to motivate CEOs to make sure a company does well and to tie their fortunes to the company's for the long term. For too long, activists say, CEOs have been richly rewarded no matter how a company has fared -- "pay for pulse," as some critics call it.
To be sure, the companies' motives are pragmatic. The corporate world is under a brighter, more uncomfortable spotlight than it was a few years ago, before the financial crisis struck in the fall of 2008.
Last year, a law gave shareholders the right to vote on whether they approve of the CEO's pay. The vote is nonbinding, but companies are keen to avoid an embarrassing "no."
"I think the boards were more easily shamed than we thought they were," says Stephen Davis, a shareholder expert at Yale University, referring to boards of directors, which set executive pay.
The typical CEO got stock awards worth $3.6 million in 2011, up 11 percent from the year before. Cash bonuses fell about 7 percent, to $2 million.
The value of stock options, as determined by the company, climbed 6 percent to a median $1.7 million. Options usually give the CEO the right to buy shares in the future at the price they're trading at when the options are granted, so they're worth something only if the shares go up.
Profit at companies in the Standard & Poor's 500 stock index rose 16 percent last year, remarkable in an economy that grew more slowly than expected.
CEOs managed to sell more and squeeze more profit from each sale, despite problems ranging from a downgrade of the U.S. credit rating to an economic slowdown in China and Europe's never-ending debt crisis.
Still, there wasn't much immediate benefit for the shareholders. The S&P 500 ended the year unchanged from where it started. Including dividends, the index returned a slender 2 percent.
Shareholder activists, while glad that companies are moving a bigger portion of CEO pay into stock awards, caution that the rearrangement isn't a cure-all.
For one thing, companies don't have to tie stock awards to performance. Instead, they can make the awards automatically payable on a certain date -- meaning all the CEO has to do is stick around.
Other companies do tie stock awards to performance but set easy goals. Sometimes, "they set the bar so low, it would be difficult for an executive not to trip over it," says Patrick McGurn, special counsel at Institutional Shareholder Services, which advises pension funds and other big investors on how to vote.
And for many shareholders, their main concern -- that pay is just too much, no matter what the form -- has yet to be addressed.
"It's just that total [compensation] is going up, and that's where the problem lies," says Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.
The typical American worker would have to labor for 244 years to make what the typical boss of a big public company makes in one. The median pay for U.S. workers was about $39,300 last year. That was up 1 percent from the year before, not enough to keep pace with inflation.
To determine 2011 pay packages, the AP used Equilar data to look at the 322 companies in the S&P 500 that had filed statements with federal regulators through April 30. To make comparisons fair, the sample includes only CEOs in place for at least two years.
Among the AP's other findings:
David Simon, CEO of Simon Property, which operates malls around the country, is on track to be the highest-paid in the AP survey, at $137 million. That was almost entirely in stock awards that could eventually be worth $132 million. The company said it wanted to make sure Simon wasn't lured to another company. He has been CEO since 1995; his father and uncle are Simon Property's co-founders.
Of the five highest-paid CEOs, three were also in the top five the year before. All three are in the TV business: Leslie Moonves of CBS, $68 million; David Zaslav of Discovery Communications, parent of Animal Planet, TLC and other channels, $52 million; and Philippe Dauman of Viacom, which owns MTV and other channels, $43 million.