Lafayette business consultant David Broman was thoroughly underwhelmed this week when he saw fresh data suggesting the boards of America's largest corporations are holding CEOs' toes to the fire when it comes to compensation.

"Excessive compensation at the executive level is going to soar again," he predicted. "There will be another round in the public markets sector of, 'I thought you took care of this!' "

Broman, CEO of Syzygy Consulting Group, was not impressed by the 2003 edition of The Wall Street Journal/Mercer Human Resource Consulting CEO Compensation Survey.

Companies increasingly are tying salaries and bonuses to company performance and relying less on stock options, according to the survey of the 2003 executive pay packages at 350 publicly traded companies. The study found that the median CEO salary rose 4 percent to $950,000 and the median bonus rose 7 percent to $1.1 million compared with 2002. Meanwhile, corporate revenue grew by a median of 7 percent, net income rose 19 percent and total shareholder return rose 27 percent.

Former Clorox Co. CEO Craig Sullivan's salary and bonus shrunk 11 percent to $2.7 million at the same time that net income rose 53 percent at the Oakland consumer products manufacturer.

Sullivan's cash and realized stock option gains last year totaled $19 million, up 172 percent from 2002. Total shareholder return was 5 percent last year.

At Oakland's Golden West Financial Corp., where net income rose 15 percent, co-CEOs Herbert and Marion Sandler received 5 percent salary and bonus hikes. His total direct compensation rose 13 percent, while her cash and realized stock option compensation fell 45 percent from 2002. Total shareholder return was 44 percent, according to The Wall Street Journal/Mercer survey.

Katz said the national data show corporate compensation is increasingly coming in line with corporate performance.

Companies nationally - although not in Silicon Valley - are also gradually moving away from stock option grants to reduce shareholder dilution and turning instead to restricted stock for long-term rewards, he said. Although companies generally are reducing the use of stock options, the more significant move last year, Katz says, was the shift away from "megagrants."

The number of companies giving CEOs stock options slipped 6 percent last year to 278. More interesting, says Katz, is that the number of companies granting options with a face value of at least eight times the CEO's annual compensation plunged 66 percent to 22 in 2002 from 62 megagrants in 2002.

Katz says the data shows that companies are responding to shareholder pressure.

"Compensation committees are drawing the line and they're saying, 'We're under the microscope from institutional investors and shareholder activists," Katz said.

Nonetheless, some observers say there are still too many corporate compensation cabals.

"You're making some people's packages very lucrative with lukewarm performance at the company," said Katherine Beall, an HR and personnel consultant in Dallas. "Public companies are moving in the right direction, but it's going to be a slow haul."

Broman says corporate compensation committees are still not advancing the interests of shareholders. He sees cozy relations between boards and CEOs, many of whom are the chairman of the board, preventing boards from genuinely reforming compensation formulas.

Those boards could learn a thing or two from private technology companies, where executives are more accountable to their investors - and salaries and job security are tied directly to increasing the value of the company.

Joe Schmoke knows about radical compensation formulas. Every two weeks, he and employees at UCI Web Group Inc. get a taste of how well the Mountain View Web services company is hitting its revenue targets. If sales are 85 percent of the goal, guess what? Chairman and CEO Schmoke and everybody else's paycheck is 15 percent thinner.