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Out-Of-Control CEO Compensation

money in hands
The financial services giant John Hancock had a tough 2002, reports CBS News Economic Correspondent Anthony Mason. Earnings were down 15 percent. The stock price was down more than 30 percent. But CEO David D'Alessandro saw his compensation soar from $8 million to more than $21 million dollars.

Now a Texas shareholder has sued saying D'Alessandro and other executives "have improperly awarded themselves excessive compensation."

The company calls the suit frivolous, but attorney Jason Adkins say, "They should give the money back."

With the stock market sliding and the economy slumping, those multi-million dollar executive packages were expected to fall too. They haven't.

Putting a pinstriped pig on its cover, "Fortune" magazine" reported that "CEO pay is still out of control."

"We thought we'd exhausted our capacity for outrage over this stuff. But when we saw the numbers this year, we couldn't help but get outraged all over again," said Jerry Useem.

"Fortune's" numbers show the median compensation for CEOs jumped 14 percent in 2002. It's now more than $13 million dollars.

"I'm amazed by how chief executives pay themselves," said David Pottruck.

Pottruck is chief executive of Charles Schwab. He believes a successful CEO should be paid well.

"But when the company is suffering through declining revenues and declining profitability, you're laying people off, people down in the trenches are seeing their bonuses shrink, how can CEO's pay them selves $5, $10, $15 million dollars? I don't understand it," he said.

In fact, Pottruck has cut his own salary by 20 percent.

He also slashed his bonus to zero and gave back all his stock options for the past three years. But Pottruck is the exception

"So how do you change the psychology?" asked Mason.

"I think shareholders have to vote with their wallets. If the CEOs are greedy, sell the stock," Pottruck replied.

But after three years of the market going down, CEO pay just keeps going up.