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Shedding Options, CEO Pay Resumes Ascent
Business Performance Takes Precedence Over Stock Price

New York, April 12, 2005 - After moderating in 2003, CEO compensation at major U.S. companies rebounded in 2004, rising 13% to $10 million under a new pay construct focused on corporate performance, according to a survey for The New York Times by compensation consultants, Pearl Meyer & Partners. Bigger paychecks coincided with an average 33% increase in net income and a 20% rise in total shareholder return at 179 companies with revenues averaging $19 billion.

Reflecting a renewed emphasis on business performance, average CEO bonuses were up 24% to $2.3 million. Stock options were the only CEO pay element that declined in value, down for a second straight year, to $3.1 million. Options have become a shrinking portion of CEO total remuneration at 31% of total pay, compared to 52% just two years ago.

Grants of restricted stock, which is credited as a better vehicle for ensuring an executive ownership perspective, soared 44% in value to $2.1 million, or nearly one-fifth of chief executive pay. Long-term incentives, in the form of long-term performance cash and performance unit plans, rose 17% to $907,000, while salary grew a relatively modest 4% to $1.1 million. The study was based on the most recent financial filings by the 179 companies, all of which had the same CEO in 2003 and 2004.

2005 Proxies Reveal Other Compensation Trends
Among other trends noted in Pearl Meyer & Partners' analysis of 2005 proxies:

• More than 75% of companies increased the cash portion of chief executive pay, compared to two-thirds that did so a year earlier.
• CEO performance metrics now include such qualitative measures as promoting corporate values and ensuring compliance.
• Boards increasingly seek compensation data that tallies total remuneration, including retirement income, benefits and perquisites, incentive values and severance payments under various short- and long-term scenarios.
• Proxy boilerplate is giving way to expanded disclosure that, at some companies, exceeds regulatory requirements by providing details and the total value of pay packages including executive benefits and perquisite.

About Pearl Meyer & Partners
Founded in 1989, Pearl Meyer & Partners is recognized for its counsel to Board Compensation Committees and senior managements. The firm specializes in the evaluation, design, development and implementation of compensation programs for executives, employees and Boards, as well as issues related to corporate governance. Services also include customized marketplace surveys, organizational development and sales incentives, all supported by strong actuarial and benefits expertise. Headquartered in New York, Pearl Meyer & Partners maintains offices in Atlanta, Boston, Charlotte, Chicago, Houston and Los Angeles.

Pearl Meyer & Partners is a practice of Clark Consulting (NYSE: CLK), a leading publicly traded firm in its field, serving more than 3,800 U.S. companies nationwide with comprehensive advice on the design, financing and administration of compensation and benefit programs.

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