Press Releases

Chief Financial Officer Pay Down Slightly in 2002

NEW YORK, March 31, 2003 - Average pay for Chief Financial Officers at leading U.S. companies fell 1% in 2002, to $3.26 million, with declines in every pay component except long-term incentives and the value of stock option grants, according to an annual survey by executive compensation consultants Pearl Meyer & Partners. The firm's third-quarter survey of 63 multi-billion dollar U.S. companies provides a preview of senior officer pay packages that will be reported to shareholders in 2003 proxy statements.

Long-term Incentives Show Biggest Growth
Long-term incentives rose 4% to $511,000, while the value of stock options was up 2% to $1.7 million, representing 53% of the total package. Average salary fell 3% to $532,000. Annual incentive declined 12% to $477,000; however, the survey relied on 2001 bonus figures becaues 2002 payouts were not available at the time.

"The CFO position has been catapulted into the spotlight during the past 18 months as a result of many high-profile accounting discrepancies," noted Steve E. Hall, President of Pearl Meyer & Partners. "Although pay leveled off in 2002, going forward, top-notch CFOs will be highly sought by large companies both for management positions and as ideally qualified candidates for service on the audit committees of corporate boards."

Other Financial Officer Compensation
Pay gains of between 3% and 9% were seen for other senior financial executives. A 5% increase put average 2002 Controller pay at $1.0 million. Treasurer pay packages grew 3% to $963,000. Average total remuneration for the Top Tax Executive was up 3% to $799,000. As expected, Top Audit Executives have risen in importance, and received the biggest increase (+9%) to $576,000.

Other Senior Executive Compensation
The Pearl Meyer & Partners survey also provided comprehensive pay data for other top executive positions, revealing minimal changes in average total compensation with the exception of a 10% pay increase to $1.5 million for Top IT Executives. Chief Executive Officer pay grew 2%, to $10.7 milllion and Top Human Resources Executives pay stayed flat at $1.6 million, while Top Legal Officer packages dropped 3%, to $2.2 million.

About the Survey
The total compensation survey is conducted by Pearl Meyer & Partners each year in the third quarter. The 2002 survey reflects the responses of 63 U.S. industrial and service companies with average revenues of $25.8 billion. Results include salary, annual bonus, long-term incentive and stock option pay levels for CEO, Top Legal Officer, Top Human Resources Executive, Top Information Technology Executive, CFO and other financial executives. More detal on each of these positions is available on request.

About Pearl Meyer & Partners

For over 20 years, Pearl Meyer & Partners (www.pearlmeyer.com) has served as a trusted independent advisor to Boards and their senior management in the areas of compensation governance, strategy and program design. The firm provides comprehensive solutions to complex compensation challenges for companies ranging from the Fortune 500 to not-for-profits as well as emerging high-growth companies.These organizations rely on Pearl Meyer & Partners to develop programs that align rewards with long-term business goals to create value for all stakeholders: shareholders, executives, and employees. The firm maintains offices in New York, Atlanta, Boston, Charlotte, Chicago, Houston, Los Angeles and San Jose.