More on looking up the ladder

In early 2005, I received the only bad performance review of my life. I was in the midst of a bout of the "brain fog" and inability to concentrate and focus that are among the lesser-known manifestations of menopause, exacerbated by a very bad cold that had lasted six weeks. I was in the midst of a very high profile project, and frankly, my testing on it sucked.

It was a brutal and scary experience, but by this year, I received perhaps the most positive performance review of my life.

But I am a mere employee, not a CEO. If I were a CEO, my performance would have absolutely no relevance to my compensation. In fact, it's entirely possible that if the performance of the company I headed didn't measure up, they'd change the benchmark for performance -- just so that I could get my bonus.

Nice gig if you can get it, right?

Of course, while ordinary Americans are pointing their fingers at Scary Mexicans because they are laboring under the delusion that the plutocracy is someday going to invite them into the club and shovel some of this largesse into their pockets; and while most of us work on a pay-for-performance basis, the rules are different if you're a CEO:

As executive pay packages have rocketed in recent years, their defenders have contended that because most are tied to company performance, they are both earned and deserved. But as the Las Vegas Sands example shows, investors who plow through company filings often find that executive compensation exceeds the amounts allowed under the performance targets set by the directors.

Executives of companies as varied as Halliburton, the military contractor and oil services concern; Assurant, an insurance company; and Big Lots, a discount retailer, all received bonuses and other pay outside the performance parameters set by the boards of those companies.

It is the equivalent of moving the goalposts to shorten the field, compensation experts say.

"Lowering the hurdles is especially disconcerting because very often the goals are not set all that high to begin with," said Lucian Bebchuk, professor at Harvard Law School and author with Jesse Fried of "Pay Without Performance." Mr. Bebchuk said shareholders should be especially alert to increases in bonuses because more companies were shifting away from stock options and into cash incentives.

Some employment agreements actually stipulate that they will provide bonuses even if company performance declines. The agreement struck in 2004 by Peter Chernin, president and chief operating officer of the News Corporation, entitles him to a bonus even if earnings per share fall at the company. If earnings rise by 15 percent in any given year, Mr. Chernin's bonus is $12.5 million. But if they fall 6.25 percent, Mr. Chernin's bonus is $4.5 million, and an earnings decline of 14 percent translates to a $3.52 million bonus.

Last year, Mr. Chernin received $8.3 million in salary and $18.9 million in bonus pay. A company spokesman declined to comment on the bonus structure. He confirmed that the company's chief executive, Rupert Murdoch, has a similar bonus arrangement. Company filings show that Mr. Murdoch received a bonus of $18.9 million last year.

While bonus and other incentive pay figures are included in company filings, shareholders hoping to calculate precisely what performance objectives executives must meet to receive such pay can be confounded.

I have some stock holdings in an IRA account, and as a result, I get these huge packages of annual reports and proxy ballots. It's the most boring thing in the world to read through, but I pay special attention to ballot issues regarding executive compensation. Because when American companies are laying people off by the tens of thousands, gutting the pensions and passing on more of the health care costs to the employees they retain, and as a result the CEO gets a bonus, something is very, very wrong with the system.