The highest paid executives in America saw a significant decrease in total cash compensation during 2002, partly due to stagnant company revenues and a dramatic drop off in executive cash bonuses. The average decrease in Executive's total cash compensation was 22.6 percent according to the 2002 Executive Compensation Index figures released today by ERI Economic Research Institute and Career, The Wall Street Journal's executive career site.

The May 2003 Executive Compensation Index stands at 131.6 (1997=100) compared to 170.1 one year ago. This is the largest drop in total cash compensation since the inception of the index in 1997.

While the average base salary for chief executive officers generally remained the same, the average cash bonus paid declined dramatically. The largest bonus decrease reported in the proxy statements was by Apple Computer. Apple computer reported a $2.26 million bonus in 2002 compared to a $43.5 million bonus in 2001. If Apple Computers' 2001 bonus is excluded from the data, total cash compensation has been decreasing since 2000 reflecting the downturn in the economy.

The Executive Compensation Index also shows that during the same period company revenues increased by 0.05 percent. The May 2003 Revenue Index stood at 161.3 (1997=100) compared to 161.2 one year ago. Since 1997 the Executive Total Compensation has grown 31.6 percent compared to a growth of 61.3 percent in companies' revenue.

"Everyone loves performance bonuses when business is rosy and bonus amounts rise, but execs have to be prepared to feel the pain during the tough times," says Tony Lee, editor in chief of "When bonuses tumble, so does total compensation for the highest paid executives. The dramatic overhaul in pay packages for executives, combined with a poor economy are forces driving the decrease in total cash compensation."

Notes ERI Director Dr. David Thomsen: "Corporate management is beginning to see the effect of stockholder interest, particularly by activist retirement funds. A recent 2003 example would be CalPers providing the vote to rebuff the SmithKline Glaxo Board proposal. The negative press has to have an affect on compensation planning."

The Index results are compiled by ERI/ each quarter and capture total cash compensation reported in the previous 12-month survey period. The Executive Compensation Index tracks the total cash compensation (salary + bonus) for the highest-paid executives at a cross section of 45 major U.S. businesses. The entire Economic Research Institute (ERI)/ Executive Cash Compensation Index and Report can be found on ERI's site at

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