The pay cuts didn't last long.
Chief executives of publicly traded companies in Maryland and across corporate America saw their compensation rebound in 2010 as profits came back and the stock market recovered much of the ground it lost in the recession.
Fourteen of the 19 companies in the Baltimore region that paid their CEOs at least $1 million last year reported increases in executive compensation in 2010, according to a Baltimore Sun analysis. The increases largely reflected improved performances by the companies.
Columbia-based MICROS Systems rewarded CEO A.L. "Tom" Giannopoulos with nearly $4.2 million in cash bonus and incentive pay after the company exceeded revenue, income and other financial goals during a fiscal year in which the company's profit rose 19 percent.
Those cash payments nearly tripled Giannopoulos' total compensation package to $7.8 million, from $2.8 million the year before, when he received no cash bonus or incentive awards.
"If we miss our number even by a dollar, you don't get paid a bonus," Giannopoulos said. "We exceeded all those [goals] substantially in 2010 even though the economy was shaky and even though the first part of our fiscal year was in really shaky business conditions."
David D. Smith, chairman and chief executive officer of Sinclair Broadcast Group, also saw a huge bump last year.
The Hunt Valley broadcaster more than tripled Smith's total pay to $3.6 million after the company went from a loss in 2009 to a profit of $76 million in 2010. Smith's salary package included a $1 million bonus and $1.6 million in stock options. He received no bonus or option awards in 2009.
Cash bonuses rebounded last year as executives met financial targets based in many cases on the profit and stock market lows of the financial crisis.
The increases come in the first year that shareholders at many publicly traded companies are getting a nonbinding vote on executive compensation packages. The so-called say on pay was part of the Dodd-Frank financial regulation package approved last year by Congress and signed by President Barack Obama.
Nationwide, total CEO compensation — including salary, bonus, stock options and other pay — rose an average of 28 percent to a median $2.8 million in 2010, reversing two years of declining paychecks, according to a preliminary survey by GovernanceMetrics International. CEOs at S&P 500 companies saw an even bigger raise: an average of 35 percent to a median $8.5 million.
Besides large cash bonuses, GovernanceMetrics found that executives reaped "windfall profits" — on paper, at least — as stock options granted at historically low prices in 2008 and 2009 began to vest last year during the market recovery.
But while executives were rewarded for better company performance, critics say that persistent high unemployment and widening wage disparities show that companies have not shared the wealth with rank-and-file workers.
"On hard economic times, when workers are asked for sacrifices, like cuts in 401(k) and other benefits, they look to their CEOs to see if there are shared sacrifices," said Brandon Rees, deputy director of the office of investment at the AFL-CIO. "When they don't see it, that hurts employee morale and productivity."
CEOs at the largest U.S. companies made on average 343 times the median worker salary last year, according to the AFL-CIO. In 1980, executives made on average 42 times the median worker salary, according to the union organization.
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires most publicly traded companies in the United States to provide more disclosure about executive compensation.
One provision that has yet to take effect is the requirement that companies disclose the ratio between CEO compensation and the median pay for all employees.
Rees said the ratio will show whether "there's a disconnect between the executive suite and the shop floor."
Some Republican lawmakers are trying to repeal the provision. A bill sponsored by Rep. Nan Hayworth, a new York Republican, recently received a favorable report in committee. And the Securities and Exchange Commission has yet to implement rules requiring the pay ratio.
For now, shareholders are casting say on pay votes. While the votes are nonbinding — they're almost always held after company boards have already approved executives' compensation packages — observers say they are being taken seriously.
"Nobody said, 'It's nonbinding, we don't care,'" said Jon Weinstein, a partner at Pay Governance, an executive compensation consulting firm in Philadelphia.
In Maryland and across the country, most pay packages have won the support of investors. Baltimore's Constellation Energy Group has been one of the few exceptions. Constellation shareholders objected to the $15.7 million paid last year to Mayo A. Shattuck III, given the company's nearly $1 billion loss.
Shattuck's pay was up 44 percent from 2009. Much of the year-over-year increase came from changes in the accounting value of Shattuck's pension and deferred earnings, which boosted his earnings by $4.9 million.
Shattuck remained as the highest-paid executive in the Baltimore region for the fifth consecutive year. Among the companies on The Sun list that have held a say on pay vote, Constellation is the only one that failed to gain support.
Constellation spokesman Lawrence McDonnell stressed that 87 percent of Shattuck's pay is based on performance.
Legg Mason shareholders will have their say on Chairman and CEO Mark R. Fetting's $5.9 million pay when the Baltimore money manager holds its annual meeting this month.
Fetting received a big boost in his performance-based bonus for the fiscal year ending March 31: $2.9 million, up from $950,000 in the previous year. The company posted a profit of $253.9 million in that year, up 24 percent from the previous year.
Legg Mason said in a statement that Fetting's incentive pay was "justified by, and in line with, our improved results during the fiscal year and is supported by comparisons of our compensation to that of our competitors."
While many of this year's millionaire CEOs are mainstays of The Sun's annual list, one executive is new. Eric I. Richman of PharmAthene earned $2.1 million last year, up from $427,045 in 2009.
Richman cracked the $1 million ceiling when he became CEO of the Annapolis biodefense firm in October 2010. Previously, he was PharmAthene's senior vice president of business development and strategic planning.
With the promotion came a bump in base salary and nearly $1.6 million in option awards last year, up from $55,533 in 2009. Richman also received a $105,000 incentive cash award in 2010, according to the company.
One well-known executive returned to the highly paid list last year. Under Armour CEO Kevin Plank saw a huge boost in pay after the Baltimore apparel maker topped $1 billion in revenue for the first time.
The bulk of Plank's annual compensation last year was $1.28 million in cash incentive tied to performance. Plank received $1.3 million in total pay, up from $748,061 in 2009.
Plank took a voluntary cut in base salary in 2008 and received no incentive pay because the company did not meet revenue goals that year. He earned $1.5 million in 2007.
Not every Baltimore area executive got a pay raise.
TeleCommunication Systems, a mobile communication technology company based in Annapolis, cut CEO Maurice B. Tosé's compensation by more than $2 million last year. Tosé's total compensation was $1.7 million in 2010.
While Tosé's base salary rose, he received only $209,093 in incentive pay, down from nearly $2.3 million in 2009.
Tosé fell short of meeting some goals based on the company's financial results, including revenue and net income, so the board's compensation committee adjusted the incentive awards accordingly, the company said in its proxy statement.
Baltimore Sun reporters Eileen Ambrose, Jay Hancock, Jamie Smith Hopkins, Lorraine Mirabella, Gus G. Sentementes and Andrea K. Walker contributed to this article.