U.S. manufacturing CEO pay up, but grows more slowly

By Chelsea Emery

NEW YORK (Reuters) - Executive pay packages at the largest U.S. manufacturing companies rose in 2007, but at a slower rate than the year before, according to a study showing how the ripples from a slowing economy and a housing slump may be slowly undercutting salaries.

Some of the largest companies in the sector, including diversified conglomerate General Electric Co and manufacturer Honeywell International Inc, cut the pay packages of their top executives, Equilar Inc, an executive compensation research firm, said on Monday.

"Pay is up, but by a small amount and it grew at a slower rate than the year before," said Equilar analyst Alexander Cwirko-Godycki. "Pay packages reflect the turbulent situation right now, in that the bonuses are down across the board."

Manufacturing and industrial companies gave packages to their top executives worth a median $7.7 million, up 1.6 percent from the year before, according to Equilar's survey of 37 companies that have reported 2007 compensation figures so far. Inflation, measured by the Consumer Price Index, rose 4.1 percent last year.

But executive bonuses tied to stock or company performance declined 5.5 percent, according to the Redwood Shores, California-based research firm.

Overall, the chief executive compensation of large U.S. companies rose 1.3 percent last year, to a median of $8.8 million, according to Equilar's study of 223 companies in the broad market Standard & Poor's 500 index

Equilar data comes from companies that have so far reported pay information for 2007. Total compensation includes base salary, discretionary bonuses, non-equity incentive plan payouts, the grant date value of stock awards, the grant date value of option awards and other compensation.

Equilar said that, while not directly comparable, a prior study it carried out last year found median CEO compensation for 194 Standard & Poor's 500 company chiefs with tenure longer than two years rose 6 percent in 2006 from 2005. That means that, while pay rose in 2007 versus 2006, the growth rate was weaker. The trend was also true for manufacturing companies, Equilar said.