The average pay of a chief executive at an American company fell by 6.8 per cent in 2008, as entities made steep cuts in bonuses in the wake of the financial meltdown.
Last year, the average cash bonus payouts for chief executives tumbled by 20.6 per cent, the study by executive compensation research firm Equilar said.
"Median CEO pay fell by 6.8 per cent from 2007 to 2008. Declines in overall compensation levels were principally driven by a steep drop in median cash bonus payouts, which fell by 20.6 per cent over the same period," Equilar said in a statement.
The study includes data for 208 S&P 500 CEOs at companies whose financial years ended between June 2008 and January 2009 and whose chief executives held office for at least two fiscals.
S&P 500 CEOs received an average total pay package of $8,446,935 last year. In 2007, the median salary stood at $9,061,057.
"From 2007 to 2008, median total compensation for S&P 500 CEOs decreased by 6.8 per cent, falling to $8,446,935. Aggregate compensation, sum of all compensation for all CEOs, also fell, dropping by 8.9 per cent," the statement said.
Last year, these CEOs were paid a cash bonus of USD 1,473,520, which is a fall of 20.6 per cent as compared to the same period a year ago. The median cash bonus paid was $1,855,989 in 2007.
"The prevalence of CEOs receiving a bonus also dropped from 92.3 per cent in 2007 to 85.6 per cent in 2008," Equilar noted.
According to the study, the aggregate bonus compensation -- the sum of all bonuses for all CEOs -- plunged by 19.6 per cent, falling from about $579 to $465.2 million.
Equilar pointed out that CEOs at S&P 500 companies in the financial services sector, saw their average compensation decline by 38.3 per cent from 2007 to 2008.
The median pay fell from "$10,488,412 to a median of $6,473,194. Median bonus payouts fell 100 per cent from $2,623,282 in 2007 to zero in 2008".
The firm said that a median of zero reflects the fact that less than 50 per cent of CEOs received a bonus in 2008.
The total compensation is defined as the sum of base salary, cash bonus payouts, the grant date value of stock awards, the grant date value of option awards and other compensation like benefits and perquisites.
While bonuses include both discretionary and performance-based payouts. Stock and option awards include grants with both service-based and performance-based vesting requirements.