J.C. Penney (NYSE: JCP) chief executive Myron Ullman received an eight percent pay cut this year because the department store chain didn't meet its performance targets. The executive took him compensation valued at just $10.1 million this year, consisting of $1.5 million in base salary with no bonus. The bulk of his compensation, however, was in stock and stock options valued at nearly $8 million. Of course, there are also the perks that come with the job. Ullman received $601,986 in other compensation that included $416,750 for personal use of a company plane.

J.C. Penney shares didn't have so much fun after the stock was cut in half from a high of nearly $85 per share to its current price around $41 per share. Luckily, shareholders will get a chance to bring the high flying executive back to the real world during the company's May 16th annual shareholders meeting. There they will have a chance to vote on a proposal that would require shareholder approval for any further severance agreements with executives as well as other aspects of executive compensation packages.

The board doens't like the idea, saying its human resources committee is in the best position to evaluate an executive's compensation package. They are concerned that shareholders may demand compensation packages so low that many executives may be at risk of leaving the company at a critical time. Sometimes executive compensation may seem high, but is necessary to retain key talent. How the situation actually unfolds remains to be seen...

Sempra Energy (NYSE: SRE) shares are off some 10 percent from their 52-week highs after profits slipped more than 20 percent, natural gas margins tightened, and liquefied natural gas business losses widened. Meanwhile, its generation business suffered from higher taxes and a three-month outage. Chief executive Donald Felsinger is also feeling the pain as he recevied a six percent pay cut, receiving just $7.3 million this year.

Felsinger received a base salary of $1 million along with $2 million in nonequity incentive payments and $91,219 in above-market returns on deferred compensation. He also received restricted stock and options valued at $3.9 million and $306,170 in other compensation, including a $93,483 401(k) contribution, $103,873 in insurance premiums, and $68,558 in tax reimbursements.

Interestingly, the stock price actually improved 10 percent in 2007 before dropping sharply at the beginning of 2008. This means that the executive's pay was tied to internal performance measures rather than external performance measures. This can be a good thing in some cases - like this one - but bad in other cases when executives fail to take actions to unlock shareholder value.

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A new research report by Equilar - the market leader for executive compensation benchmarking solutions - showed a decline in bonuses for chief executives while 10b5-1 stock trading plan usage is up. The study surveyed 178 companies with annual revenues of more than $1 billion, designed to represent the larger Fortune 500 firms.

The study found that CEO bonuses fied to annual performance plans fell by 18.6% while the prevalence of such payouts fell from 77.5% in 2006 to 70.4% in 2007. However, overall bonuses for chief executives grew by 1.4% over 2006 amid a rise in discretionary awards and cash payouts from annual and multi-year performance plans. The prevalence of these discretionary bonuses increased slightly.

The study also found a rise in the usage of 10b5-1 stock trading plans. The number of officers using this plan increased 5.5%, but the change actually reflects a slowdown in adoption rates. In 2007, 31.8% of Fortune 500 companies had at least one Section 16 officer using such a stock trading plan, which is up from just 28.7% the year before and 25.6% in 2005.

In the end, these results should be surprising given the poor performance of stocks. It looks like more bonuses are shifting from performance-based to discretionary while more executives are getting on plans to sell stock regularly.

New York Times (NYSE: NYT) chief executive Janet Robinson received a mere $2.1 million in 2007 total compensation - a 38% pay cut from last year. The executive's compensation consisted of a $1 million base salary and $1.1 million in non-stock incentive bonuses. She was eligible to receive up to twice her salary if certain targets were met, but the executive failed to attain the targets and received no stock options.

The decrease in compensation was mainly due to a policy change, however. The New York Times changed the timing of its awards to February following the year for which they are intended as compensation for. Robinson received 650,000 options as compensation in 2007 along with 65,000 in preferred stock. These amounts will be reflected in the executive's 2008 total compensation. So much for hoping...

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Bristol-Myers Squibb (NYSE: BMY) chief executive James Cornelius received a big raise in 2007 despite mounting problems faced by the company. Cornelius is set to make $13.5 million - five times his 2006 wage - as the company faces increased competition and a thinning development pipeline that has many investors worried.

Cornelius' compensastion consisted of a base salary of around $1.4 million, a bonus of $1.1 million, roughly $2.2 million in other incentives, and other compensation totaling $424,954. This other compensation included required company jet travel, car allowances, and a housing allowance. The remainder of his compensation came in the form of stock options and restricted stock worth around $8.4 million.

Shareholders didn't receive anything from the company during this same time period. In fact, the stock dropped 1.2 percent in 2007 while profit rose a mere 36.5 percent. Meanwhile, the company also announced that it would cut 10 percent of its workforce in an effort to restructure and save $1.5 billion by 2010.

The worst new for investors, however, is the expiration of its Plavix patent, which will cause a sharp drop in revenues. This will happen in November 2011 and the company also faces several more expirations over the next several years and generic drug companies continue to challenge patents.

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American Axle & Manufacturing (AXL) may be locked in a dispute with striking works over steep wage cuts, but that didn't stop the company's chief executive from receiving a nine percent raise. In fact, Dick Dauch's salary grew to an astonishing $10.2 million just after strikes by some 3,650 workers are now entering their fifth week. Other executives also received compensation amounting to $30 million for 2007.

American Axle has proposed cutting labor costs in the U.S. that now average above $73 per hour to between $20 and $30 in an effort to reduce costs and improve their bottom line. However, the union behind the workers rejected the proposal and charged that the company was utilizing unfair labor practices by withholding key financial information that could be used to justify higher wages.

The company's argument that it cannot compete with US factories that pay wages and benefits on par with major US automakers as its total wages now run more than three times that of competitors. But then, why aren't executives taking any of the cuts as well?

Bank of America (NYSE: BAC) chief executive Ken Lewis received a total of $17 million in compensation during 2007 compared to $96 million in 2006. The executive's bonus also came in at a mere $4.25 million, which is down from $6.5 million a year earlier. The cut in pay was actually steeper than shareholders' 22 percent loss holding the company's stock during the same time period.

"We believe our executive compensation program results in total compensation awards that are reasonable and appropriate in amount, align our executive officers' interests with those of our stockholders, are directly linked to our performance and are easy for our stockholders to understand," said the compensation committee in a statement.

Indeed, Bank of America appears to be one of the few companies actually getting it right this time around. The executive made far less money because he either didn't or wasn't able to exercise his stock options given the lower price thanks to problems with its mortgage securities.

Interestingly, shareholders will also get to vote on a new pay proposals during the company's April 23rd annual meeting that would give them a non-binding executive compensation vote. This is a proposal that has been making its rounds and it quickly becoming the norm. In the end, Bank of America may not need one since they got it right!

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Verizon Communications (NYSE: VZ) chief executive Ivan Seidenberg received $20.3 million in 2007, which is up from $20.2 million from the year before, according to a regulatory filing made with the SEC. The executive's base salary was $2.1 million with a bonus of $4.2 million and stock award of $13.1 million. Meanwhile, the company's stock rose 17.3 percent in 2007 as the street started to get over skepticism about a plan to make fiberoptic connections to connect its customers.

Seidenberg also received perks worth $825,312, including $149,023 in personal use of the company aircraft, and $431,395 in contributions to a deferred savings plan. Interestingly, Verizon is also one of the few companies that opted to give shareholders a non-binding vote on executive comensation. Next year, shareholders will be able to cast their vote on whether or not the 2008 compensation package is reasonable. Last year, shareholders voted by a slim margin to adopt such provisions intially suggested by The Association of BellTel Retirees. In the end, the company seems to be on track with its executive compensation.

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