Upfront: Why Your CEO Is Smiling

A Watson Wyatt Worldwide review of proxy statements filed by large U.S. companies last year shows that compensation for corporate executives rose substantially in 2003.

The in-the-money value of their unexercised stock options jumped 53 percent from a median of $5.4 million in 2002 to $8.3 million in 2003, marking a sharp reversal from the previous two years, when the in-the-money value of stock options declined.

At the same time, executives' annual bonuses increased 13 percent, to an average of more than $1 million, last year. And their base salaries rose 8.3 percent, to an average of $818,000.