The market turmoil and increased public scrutiny of executive pay continue to impact companies’ compensation decisions, with more companies mulling freezing salaries, lowering bonus payouts, and cutting stock-based awards, according to the latest survey by compensation consultancy Pearl Meyer & Partners.

Among 436 board members, executives, and human resources professionals surveyed in February, 90 percent say the troubled economy will color their compensation decisions over the next six months. The poll, Executive Pay in the New Economy, updates a similar study of 410 participants conducted by PM&P last November.

Boards and management are increasingly moving to reexamine executive pay design even in industries not directly affected by the executive pay restrictions imposed by Treasury on companies that have taken federal TARP funds, says David Swinford, president and CEO of Pearl Meyer & Partners.

Among other things, companies are eyeing bonus payouts below formula. While bonuses shrink when performance targets are missed, more companies plan to exercise negative discretion and cut incentive payouts more deeply than prescribed by the performance plan formula.

Roughly a quarter of respondents expect to pay no year-end bonuses for 2008, while 42 percent are considering paying bonus amounts that are less than what executives would’ve gotten based on the plan’s stated performance objectives for 2008, and only 44 percent expect to pay this year’s incentive payout “at formula.”

Half of respondents—nearly three times as many as in the November survey—said their companies have implemented or are “strongly considering” imposing an executive salary freeze. Even among those that expect to provide raises, expectations are modest: fewer than 6 percent of respondents expect to boost salaries by more than 5 percent.

Moreover, nearly 60 percent of respondents anticipate a reduction in 2009 long-term incentive awards—the stock option and restricted stock grants that comprise the bulk of executive compensation in many industries. Of those, half predict values will be “considerably lower.”

*Editor's Note: The following chart on executive compensation was provided by Pearl Meyer & Partners.