The chief executives of America's 500 biggest companies got a collective 38 per cent pay raise last year, to $7.5 billion. That's an average $15.2 million apiece. Exercised stock options again account for the main component of pay, 48 per cent. The average stock gain was $7.3 million.

The highest-paid boss of the 500 companies we tracked: Apple chief Steve Jobs. He drew a nominal $1 salary but realized $647 million from vested restricted stock last year.

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The next four top-paid chief executives also earned most of their pay from exercised stock options: Ray Irani of Occidental Petroleum ($322 million total pay), Barry Diller of IAC/Interactive Corp ($295 million), William P. Foley of Fidelity National Financial ($180 million), and Terry Semel of Yahoo! ($174 million).

We count compensation when it turns into cash or marketable stock; we do not value or count options until the executive exercises them. When calculating a chief executive's total pay, we measure the following for the company's latest fiscal year: salary and cash bonuses; other compensation, such as vested stock grants; and stock gains, the value realized by exercised stock options.

Amid a public outcry over executive compensation, the U.S. Securities and Exchange Commission cranked out tougher new rules on pay disclosures. The result is that proxies, the documents that, among other things, disclose executive compensation, are fatter this season, yet they don't necessarily paint a clearer picture for shareholders.

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To understand Sprint Nextel's compensation, you have to read more than 50 pages of complex tables and long-winded sentences.

In our sixth annual performance-versus-pay scorecard, we again set out to find the boss who delivered the best bang for the buck. This year, we found 189 bosses whose company has been publicly trading since April 2001, have been in office at least six years and have at least six years of pay history.

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 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.

For the second consecutive year, the chief 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 $723,000 a year in each year, while delivering a 39 per cent annual return to shareholders.

Since he took over as chief in May 1999, he has delivered an annual 29 per cent return to shareholders, which is significantly better than the 2 per cent annual return of the S&P 500 of that period.

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Also for the second consecutive year, 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. Masco's six-year annual return of 5 per cent lagged in comparison with Masco's sector, which includes a number of building materials' companies. Manoogian has been collecting a paycheck averaging $11 million a year.

This year, we not only tracked chief executive compensation, but we also looked at the kingpins who run private equity and hedge funds. Reaping the rewards of percentage fees, the 20 top Wall Street fund managers earned an average of $658 million in 2006, versus $145 million for the 20 highest-paid chief executives.

A special thanks to Salary.com's CompAnalyst Executive, which provided us with compensation data on our 500 survey companies.

Components of Compensation

Salary: Annual base salary earned during the fiscal year.

Bonus: Annual incentives earned during the fiscal year and discretionary bonuses.

Other: Includes long-term incentive payouts and the value realized from vesting of restricted stock and performance shares. Also includes other executive personal benefits, such as premiums for supplemental life insurance, annual medical examinations, tax preparation and financial counseling fees, club memberships, security services and the use of corporate aircraft.

Stock gains: Value realised during fiscal year 2006 by exercising vested options granted in previous years. The gain is the difference between the stock price on the date of exercise and the exercise price of the option.