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Confidence wanes among chief executives

Chief executives of major American corporations — vexed by a war, rising raw material costs and a precarious U.S. economy — are pulling in their horns and growing more bearish, The Conference Board reported.

In a quarterly canvass of the nations chief executives, the business think tank said its Measure of Business Confidence, which had rebounded to a reading of 58 in the final quarter of 2002, fell back to a level of 53 during the first quarter of 2003.

"Although their short-term outlook signals economic growth in the months ahead, their cautious hiring plans suggest this growth will be moderate," said Lynn Franco, director of The Conference Board's Consumer Research Center.

The Conference Board took pains to note that the survey was conducted during the build-up to the war with Iraq. A reading of 50 or more reflects more positive than negative responses.

Chief executives' overall assessment of current economic conditions fell sharply during the first quarter, dropping to a level of 40 from 52 in the fourth quarter of last year. A rising percentage say current economic conditions have worsened — 39 percent vs. 27 percent in the prior quarter. Looking at their own industries, about 43 percent say business conditions have eroded, up from 31 percent.

Expectations for the next six months are mixed. While the outlook is less optimistic than last quarter — down to 60 from 63 — chief executives remain generally upbeat, and industry expectations improved modestly, to 60 from 59.

Chief executive compensation

Wal-Mart ceo Lee Scott was paid $18.3 million in 2002, more than doubling his 2001 paycheck, the retailer reported in a federal filing. Substantially boosting his payday was $13.1 million in restricted stock.

Scott was paid a salary of $1.14 million, and in addition received a bonus of $3.16, up 77 percent from his 2001 bonus.

Scott's total compensation package of $18.3 million was up more than 111 percent from $8.66 million the prior year.

In its annual proxy statement, Wal-Mart said Thomas Coughlin, executive vp, had his pay rise by more than 153 percent, to $7.87 million from $3.11 million in 2002.

Allen Questrom, ceo, J.C. Penney Co., received a $2 million bonus in 2002, an increase of $100,000 over the year before. He was also paid a salary of $1.4 million, up modestly from $1.3 million the prior year, the retailer said in a proxy filing. Questrom also received $3.7 million in restricted stock, something new to last year's compensation package.

Additionally, Questrom was given options for 459,119 shares of common stock. He had received no stock option grant the prior year. The retailer said that if Penney stock appreciates by 5 percent a year for the next nine years, the value of the stock options will be $5.8 million.

Target ceo Robert Ulrich received a salary of $1.423 million last year, virtually flat, up just 0.6 percent, from $1.415 the previous year, the retailer reported in its annual proxy statement. But his bonus jumped up by 24.3 percent, to $4.6 million from $3.7 million.

As Home Depot missed key financial goals last year, it slashed ceo Robert Nardelli's compensation by almost 17 percent, to $11.5 million from $13.8 million the prior year. Nardelli's bonus was pared to $4 million from $5 million.

Rival Lowe's, on a roll, boosted its ceo Robert Tillman's performance-based bonus by almost 60 percent, to $3 million from $1.9 million the preceding year. Last year, Lowe's profits shot up by 44 percent, while sales improved by 20 percent.

Tillman was also paid a salary of $1 million, up 7 percent from $935,000 the year before.

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