Constellation Energy Group dominated the list of the most highly paid local executives in 2007, a year in which the company's stock price rose nearly 50 percent.
Leaders at the Baltimore Gas and Electric Co. parent accounted for four of the top 10 - and more than $40 million in compensation combined. Topping all other executives at publicly traded companies was Constellation Chief Executive Officer Mayo A. Shattuck III, who earned about $14 million last year in salary, stock awards, options and the like.
Baltimore money manager Legg Mason Inc.'s executives had less reason to celebrate. The company's stock price declined 40 percent in its last fiscal year - and so did Chairman Raymond A. "Chip" Mason's compensation.
Big corporations continue to be rewarding to run, even at a time of economic and stock volatility - Mason's $8.1 million pay was still enough to rank him seventh among the area's executives. But analysts say something new is afoot: After years of complaints from shareholders, politicians and unions, public companies nationwide are getting better at linking executive compensation to performance. Experts anticipate continued improvements, not the least because investors are having some success with "say on pay" votes that register their ire.
"Some of the major changes have happened to long-term incentives, and that takes a little longer to play out," said Paul Hodgson, senior research associate at the Corporate Library, a governance research firm. "So there's a lag time between change and effect."
The Sun pored through filings made by local public companies that detailed pay for CEOs and other high-ranking officials such as chief financial officers. According to that analysis:
* For executives who worked for their companies in both 2006 and 2007, the median change in pay was an 8 percent increase. That means half got more and half got less.
* Higher-paid executives tended to get smaller increases. For executives earning at least $1 million in 2006, the median change last year was a pay raise of 4 percent.
* Fifty executives - about 30 percent - saw their pay drop in 2007. But that includes some who quit partway into the year.
Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, said it was typical for companies to try to keep up with the Joneses, a philosophy that drives compensation skyward. But investor anger has company boards thinking twice.
