Average compensation, however, declined overall as well as in each component. Average total compensation dropped 23.1% to $5 million, while the average salary was off 7.1%; options, 4.7%; and stock, 32.2%. Boyd says more low numbers this year–seven CFOs received less than $2 million in compensation vs. just one in 2008–pulled down the average.

Other research shows a slight increase in total pay, however. A study of 92 CFOs at Fortune 200 companies conducted by Steven Hall & Partners, a New York-based compensation consulting firm, found median total pay was up ever so slightly, by less than 1%. Salaries were up 1.3%, but long-term incentives for the group were down a total of 56.5%. Average total compensation rose 2.5%, with long-term incentives declining 6%.

Some pay decreases were the result of idiosyncratic factors related to stock awards meant to cover multiple years. For example, pay for Peter Oppenheimer, CFO of Apple, fell 93% to $1.4 million because in 2008 he received $19 million in units meant to cover both 2008 and 2009; in 2008, his compensation grew by 1,037%.

In some cases CFOs' pay increased as a result of hefty retention grants. At AT&T, CFO Richard Lindner received a special one-time award of $2.9 million in stock; his total pay rose by 74%, to $9.4 million. At MetLife, a one-time retention award of $1 million in options and $1.3 million in stock increased CFO William Wheeler's pay 57% to $5.6 million.

Furthermore, the stock grants reported in current proxies were made in the first quarter of 2009, which turned out to be the lowest point of the year for the stock market.

Using the value of shares on the day of the grant, the value of stock and option awards appears to have dropped from 2008. But, thanks to the market's unexpected comeback, the value on paper is now higher. "Companies didn't take into account the possibility that the stock price would rebound in a big way," says Boyd.

This year, the story could be quite different, depending on how the economy and companies perform. Long-term stock awards granted at the beginning of the year are likely to increase in value as long as the market continues its upward trajectory. Furthermore, if a company's performance improves, then both incentive and long-term bonuses will shoot up. "If 2010 is a strong year, there will be a higher bonus," says Kelly Malafis, a partner with Compensation Advisory Partners, a New York-based executive compensation consulting firm. "If not, it will be lower. What happens this year will be all about performance."

But the prognosis for healthy economic growth and higher employment is far from certain. Without a sustained recovery–and continued improvements in company performance–pay is likely to remain flat, many compensation experts say. At the same time, thanks to a continued government focus on executive pay, as well as new and pending federal regulations, many companies are wrestling more than ever before with how to design their plans to align pay with performance, while discouraging too-risky behavior.

The upshot is a widespread re-examination of the components of pay, especially those related to long-term compensation, amid continued uncertainty about company performance and economic growth. "A lot of companies have successfully navigated through troubled waters," says Carol Bowie, head of RiskMetrics Group's Governance Institute. "But they're still unsure about everything from shareholder value to the impact of new disclosure rules."

Already, though, there are signs of a thaw. In a survey of 187 companies conducted by Towers Watson, a New York-based human resources consulting firm, at the end of last year, 92% of respondents said they were not planning to reduce bonus opportunities or eligibility requirements for executives. According to Steven Van Putten, managing director at Pearl Meyer & Partners, a New York-based compensation consulting firm, companies that had put in place pay freezes or reductions are starting to move base salaries for executives back up to previous levels. "We've seen quite a bit of that this year in industries pretty much across the board," he says.

The rally in stocks has given some companies more confidence. "Last year, people were wondering when the next crash would be," says Joseph Sorrentino, managing director at Steven Hall. With things somewhat more settled, he sees some companies more willing to tread in places they feared might anger shareholders the year before.

Sorrentino points to a company that last year considered including in the proxy a request for more stock to use as compensation. At the last minute, the client decided not to follow through, worried whether the request was necessary and how it would be received by shareholders. This year, facing a considerably higher stock price and a more predictable future, the company decided to go ahead with the move. "They felt they were in a better position to ask for more shares," he says.

In any case, the timing is probably good for CFOs, largely because the role of the finance chief has assumed added importance in the current climate. "The market for CFO skills has never been higher," says Sorrentino. "I think that means CFOs can expect healthy increases this year." Van Putten says he has seen a rise in "significant" salary adjustments specifically for CFOs, especially at companies providing little or no merit increases.

Still, there are a lot of complex factors–when and by how much the economy will improve, whether interest rates will rise, if the market resurgence can be sustained, and whether public ire over outsized executive compensation will die down. "A lot of companies in a lot of industries are still dealing with the impact of the economic crisis," says Bowie. "There's still a great deal of uncertainty about what the year will bring." Such uncertainty is one reason why 20% of companies responding to a recent survey conducted by New York-based HR consultancy Mercer are allowing for increased discretion related to payouts.

At the same time, there's a continuing reassessment of all aspects of pay. Many firms are "revisiting and adjusting the design of their programs," says Bentham Stradley, west division practice leader for executive compensation at Towers Watson. About 31% of companies said they plan to change the metrics in their annual incentive plans, the Towers Watson study found, while 29% are raising performance goals relative to the year's actual performance and 39% have changed or plan to revise long-term incentive vehicles. The Mercer survey found that one-third of organizations have introduced new financial measures to their annual incentive plans, while another 17% introduced non-financial measures. Such readjustments are becoming the norm, according to Sorrentino. He expects compensation to be tweaked more often–perhaps annually, as opposed to every two or three years in the past.

According to Stradley, the big action is in long-term pay. More companies are changing the number of vehicles they use, he says, ranging from a rise in the use of restricted stock based on performance, rather than time on the job, to less emphasis on stock options. He points to a pharmaceuticals company that recently added stock awards based on shareholder return relative to a group of peers. "They were interested in emphasizing awards that could be subject to performance-based considerations," Stradley says.

Then there's the matter of tax gross-ups, payments meant to cover taxes on an executive's severance package. They tend to drive up the cost of severance considerably, according to RiskMetrics' Governance Institute. Under pressure from shareholders, an increasing number of firms, including Kohl's, Walgreen and Jack in the Box, have recently curtailed or eliminated tax gross-up provisions.

Of course, the compensation practices at financial services firms continue to attract the most attention. That includes companies still in the government's Troubled Asset Relief Program (TARP), as well as those that left specifically to escape its strict pay requirements. For example, Kenneth Feinberg, the Treasury's special master for compensation, recently announced he's reviewing executive compensation of the 25 top executives at 419 companies that received TARP largesse to see whether any money should be returned. Large cash payments not tied to performance are likely to be a particular focus. Separately, Feinberg cut pay by an average of 50% for top executives at seven companies still receiving TARP assistance–AIG, Citigroup, Bank of America, Chrysler, General Motors, GMAC and Chrysler Financial.

Concerns over executive pay levels at current and former TARP recipients continue to trickle down to the rest of corporate America. That's particularly true when it comes to questions of risk and just how much specific pay structures encourage risky actions. "It remains a hot topic," says Sorrentino. The concern has been heightened by other regulatory developments, particularly the Securities and Exchange Commission's new rules requiring companies to disclose whether overall compensation programs could create incentives for excessive risk-taking.

According to Towers Watson, 94% of companies expect more scrutiny of executive pay over the next two years as a result of new legislation. And 54% have or plan to add a formal risk assessment process. As a result: "We'll start to see less fuzziness around compensation and risk assessment," says Randy Ramirez, regional practice leader in the human capital consulting practice of BDO, a Chicago-based accounting firm. "And that could affect the structure of compensation as a whole."

Ramirez points to a company that, until recently, based cash bonuses on revenue growth, not an unusual approach. The company had gone on an acquisitions spree the previous year, buying more than 20 businesses. While the move boosted revenue significantly, it also substantially increased the company's debt. Not only that, top management had difficulty integrating all those new purchases into a cohesive organization.

With a better risk assessment process, the company might not have pursued that strategy at all, according to Ramirez. And with a different incentive structure, he says, top executives would have been less inclined to accept the plan and more interested in following other growth strategies.

The focus on risk has affected a number of compensation areas. For example, according to Van Putten, more companies are evaluating the mix of short vs. long-term pay components "so you don't incentivize short-term performance at the expense of long-term results."

Companies are also starting to include longer-term goals for cash compensation. While such pay used to be based on quarterly or annual results, the measuring stick is being extended to anywhere from 18 months to three years. "That's the next wave in compensation," says Ramirez. Case in point: a chemicals company that historically used quarterly and annual metrics to award cash bonuses. Now, they're changing that time frame to as long as three years, "so the executive can't get away with a quick hit to the books," Ramirez says. "Executives have to focus on sustaining growth."

The most widespread change will probably be a stepped-up emphasis on clawback provisions. Seventy-three percent of Fortune 100 companies said they had clawback policies in 2009, compared with just 18% in 2006, according to Equilar. Boards also are moving to refine the clawbacks they have. That could mean anything from pinpointing the specific compensation element covered to expanding which individuals might be subject to a clawback. "You'll see more attention given both to whom and what the clawback covers," says Peter Oppermann, a partner at Mercer.

It's a delicate dance, however. "If you discourage risk too much, it could be counterproductive," says Van Putten. One common solution, he says, is to replace stock option programs with performance share programs. He cites a consumer products company that had relied on stock options awarded on the basis of operating income performance. and recently decided to reduce the value of options by one-half and replace them with performance shares that would vest in three years only if specific goals were realized. The company also added a net-share retention requirement on stock options, mandating that executives hold onto 50% of any shares realized from exercising options until they meet a specific ownership requirement.

Efforts to reform compensation practices in the financial services industry have affected another area, "say on pay." Because corporate governance advocates expected Congress to pass financial reforms mandating that public companies give shareholders an advisory vote on executive pay, they were less active in pushing shareholder proposals requesting that companies adopt such policies. "By the time it became clear it wasn't going to be mandated for 2010, a lot of the deadlines for filing proposals had passed," says Bowie. The result, she says, has been a drop-off in the number of shareholder proposals, from about 120 last year to around 60 this year.

Ultimately, however, Bowie wonders whether, once the economy improves and the experience of the latest economic crisis recedes, financial services companies–and others–will return to previous compensation practices. "We've seen it before–a lot of Sturm und Drang occurs," she says. "But as memory recedes, it goes back to business as usual." Wells Fargo CFO Howard Atkins already received an increase in base salary, from $700,000 to $1.7 million, as soon as the company exited TARP earlier this year, Bowie notes.

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