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updated 4/20/2006 8:14:52 PM ET 2006-04-21T00:14:52

The chief executives of America's 500 biggest companies (as measured by a composite ranking of sales, profits, assets and market value) received an aggregate 6% pay raise last year, which pales in comparison to their 54% pay raise in 2004. In total, America’s top executives earned a healthy $5.4 billion last year.

The average paycheck for last year for each boss works out to $10.9 million. For the group of 500 as a whole, aggregate stock gains accounted for 51% of total compensation, versus 53% a year ago. The average boss realized $5.6 million from exercising options last year.

Richard D. Fairbank, chief executive of Capital One Financial, was the top earner in 2005. Fairbank’s $249.3 million in total pay came almost entirely from exercised stock options.

The same goes for the next four top-paid chief executives: Terry S. Semel of Yahoo! ($231 million), Henry R. Silverman of Cendant ($140 million), Bruce Karatz of KB Home ($136 million) and Richard S. Fuld Jr. of Lehman Brothers Holdings ($123 million).

When calculating a chief executive’s total pay, Forbes measures the following for the company's latest fiscal year: salary and bonuses; other compensation, such as vested restricted stock grants, long-term incentive payouts and perks; and stock gains, the value realized from exercising stock options. Because the value of unexercised options is unpredictable, we do not consider them in our tabulation of total compensation.

In our fifth annual performance versus pay scorecard of the best and worst chief executives, we again set out to find the bosses who delivered the best bang for the buck. Of the 500 biggest companies in the U.S., we found 189 chief executives in our database who have been in office for at least six years and have at least six years of pay history. We score these 189 bosses for how well their firms’ stock performance stacks up against their pay over the same time. Because a volatile stock market or an unusually large gain from exercising options can skew results for a single year, we look at pay and performance over the six-year period.

Our grading uses four factors. One is the company's stock performance (including dividends) relative to that of its industry peers over six years. Two others (most heavily weighted) are annualized stock performance during the leader’s tenure and performance relative to the S&P 500 during that time. The last factor is total compensation over the past six years.

Leading our list of chief executives who delivered the most value for the money is John Bucksbaum of General Growth Properties, a real estate investment trust. Over the past six years, Bucksbaum has been paid a modest $624,000 a year in each of the past six years, while delivering a 37% annual return to shareholders. It sure seems as if Bucksbaum deserves a healthy raise.

Video: What's behind huge CEO paychecks? At the bottom of our performance/pay rankings is Richard A. Manoogian, chief executive of Masco, a manufacturer of housing products such as faucets, gutters and cabinets. While his stock has beaten the S&P 500 over six years, it lags in comparison with Masco’s sector, which includes a number of big home builders. Manoogian has been collecting a paycheck averaging $9 million a year.

Our online presentation of the CEO compensation special report includes slide shows of the bosses with the best and worst performance relative to pay; the biggest paychecks of 2005; our 20/20 club (ten executives who have produced at least 20% returns annually over at least 20 years); and highlights of this year’s report.

© 2012 Forbes.com

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