From writer Paul Murdoch of Forbes:

"Forbes' latest look at the compensation of top executives at the 500 largest companies in America shows that 120 of the 500 chief executives took pay cuts last year, in terms of base salary and bonus. The average reduction in salary plus bonus for those 120 executives: 29%. It is worth noting that some of these executives still managed to deliver handsome returns to shareholders.

Example: David N. Weidman, chief executive of Celanese. Sales of the chemical company were up 12% in 2007, the first double-digit increase since Weidman took the reigns three years ago. Profits, on the other hand, have increased at a slower rate, up 5% in 2007 and just 2% for the past 12 months. In fiscal 2007, the value of Weidman's salary plus bonus slipped 11% to $2.9 million. Yet, Celanese shareholders have enjoyed a 64% total return in 2007 and 36% over the latest 12 months. During those stretches, the S&P500 returned 4% and a loss of 7%, respectively.

The following table lists chief executives who have had their core compensation (defined as base salary plus bonus) cut by the greatest percentage in the last year despite outperforming the S&P 500 over the same time period. Some of these executives still brought home millions in total compensation, thanks to stock grants that vested during the year. Stock grants usually vest after a pre-determined time period or when a company's stock meets a specific price target.

Smith International's chief executive, Douglas L. Rock, is one such executive who cashed in on vested stock grants, while taking an 8.7% cut in base pay last year. His salary plus bonus in 2007 came to $3 million vs. $3.3 million the prior year, but Rock more than made up the difference, earning an additional $8.5 million in vested stock grants linked to performance. While Rock's total compensation in 2007 was a robust $12.1 million, only $700,000 below the average compensation of all 500 executives tracked by Forbes, shareholders of the oil services concern enjoyed a total return of 81% during the year.

For the list below, we excluded executives from our list of the 500 largest companies in America who exercised stock options last year or where the proxy statement did not provide a breakdown of annual vs. long-term bonuses."

Lower Salary Plus Bonus But Big Stock Returns