CEO Median Pay Grew $280,000 From 2006

Washington, D.C. (AHN) - Amid an economic slowdown in the U.S., American chief executive officers continued to enjoy hefty pay increases.

The median pay of CEOs from Standard and Poor's 500 list totaled almost $8.4 million or an increase of $280,000 compared to two years ago, according to AP. Overall, the CEOs enjoyed a 3.5 percent pay hike, while the rest of the nation saw their homes foreclosed, became unemployed and hungry.

Merill Lynch CEO John Thain headed AP's list of big earners with a $83 million compensation package which included a signing bonus and other perks to leave his former post at the New York Stock Exchange.

Is CEO pay linked to company performance? While the top 10 CEOs collectively earned over half a billion dollars in 2007, 50 percent of the companies they headed experienced drastic declines in profitability.

A Watson Wyatt survey, however, said there was a link between high pay and performance. The survey showed high performing chief executives with a three-year total returns to shareholders of 101 percent were given payouts averaging 156 percent of their targets. Despite performing 33 percent below performance targets, CEOs still received 71 percent of their payout.

Some firms, however, whittled the pay of their CEOs following the dip in the company's stock prices, which formed part of their compensation package.

The debate over excessive CEO pay has reached the U.S. presidential campaign. Both Democrat candidate Barack Obama and Republican John McCain favor granting shareholders more voice in determining executive pay. But Obama wants the voice given legislative fiat, while McCain prefers leaving the matter for companies and shareholders to resolve.