In the second installment of coverage of the AFL-CIO's "2008 Executive PayWatch" report, the disparity between pay and performance - not just the sheer amount of compensation - is critiqued:

"Boards of directors are responsible for setting CEO pay. Frequently, however, directors award compensation packages that go well beyond what is required to attract and retain executives and reward even poorly performing CEOs. These executive pay excesses come at the expense of shareholders, as well as the company and its employees.

According to a recent study by ERI Economic Research Institute and The Wall Street Journal, executive compensation grew substantially faster than corporate earnings in the past year. The study of 45 randomly selected public companies found that executive compensation increased 20.5 percent from a year ago, while revenues grew just 2.8 percent.

During the past 12 months, overall total compensation of the highest-paid executive increased 20.5 percent while revenues increased 2.8 percent, the study found. As of February 2008, the average top executive received overall total compensation of $18,813,697, according to the study. In comparison, the median pay for workers rose only 3.5 percent to $36,140 in 2007, from $34,892 the previous year, according to the U.S. Bureau of Labor Statistics.

Moreover, while performance-based bonuses for chief executives of large public companies dropped in 2007, companies more than made up for that decline by giving out bigger discretionary bonuses and other payments not tied to a specific financial target, according to a recent study by Equilar, the executive compensation research firm.

Equilar found that the median value of bonuses tied to performance fell 18.6 percent in 2007, from $949,249 to $772,717. Thanks, however, to sizable increases in discretionary awards and multi-year performance awards, overall CEO bonuses for 2007 inched up 1.4 percent to a median value of $1.41 million from $1.39 million in 2006."