The AP review of compensation for the heads of companies in the Standard & Poor's 500 index finds the median pay package added up to nearly $8.4 million. That’s a comfortable gain of about $280,000 from 2006.

The 3.5 per cent pay increase for CEOs came even as the landscape for both workers and shareholders darkened considerably and the economy was choked by a housing market in free fall, layoffs and soaring prices for fuel and food.

At the top of the AP list is John Thain, who took the reins of Merrill Lynch on December 1, 2007. His $83 million pay package was supercharged by a signing bonus and other enticements that lured him from the New York Stock Exchange to lead the investment bank as it was suffering its worst-ever losses.

Collectively, the 10 best-paid CEOs made more than half a billion dollars last year. Yet half the members of this stratospheric club were leading companies whose profits shrank dramatically.

The AP examination of CEO pay in 2007 mined data from the 410 companies in the S&P 500 that filed compensation disclosures with federal regulators in the first six months of this year. The AP’s formula, based on data from the past two years, adds up salary, perks, bonuses, above-market interest on pay set aside for later, and estimates for the value of stock options and stock awards on the day they were granted last year.

That provides a clearer picture than pay totals required by the Securities and Exchange Commission, compensation experts say, because the SEC totals include expenses companies book during the year for previously granted stock compensation and retirement benefits.

The value of stock and options given to CEOs may turn out to be significantly higher or lower if they are ultimately cashed out, but the numbers in the AP formula do reflect the board of directors’estimate of the likely eventual payout. The median salary figure of about $8.4 million means half the CEOs in the AP analysis made more than that and half made less. There were some signs companies were pulling back on pay at the top: out of the 316 companies in the AP survey that had the same CEO two years running, about two-fifths lowered the total pay package for their CEOs.

Rick Wagoner, chief executive of General Motors Corp., announced earlier this month the company had to close four plants that make trucks and SUVs because of lagging demand as fuel prices soar. That followed the posting of a $39 billion loss in 2007, a year when its stock price fell by about 19 percent, without adjusting for dividends. And Wagoner? His pay rose 64 per cent, to $15.7 million. Last year was rocky for the economy and the stock market, making it a useful test of a concept called pay for performance — a term companies use to sell shareholders on the idea CEOs are being paid based on how well the company does.

Here’s the payload

J. Thain $83.1 Merrill Lynch

L. Moonves $67.6 CBS Group

R. Adkerson $65.3 Freeport McMoran

B. Simpson $56.6 XTO Energy

L. Blankfein $53.9 Goldman Sachs

K. Chenault $51.7 American Express

E. Isenberg $44.6 Nabors Industries

J. Mack $41.7 Morgan Stanley

G. Murphy $39.1 Gap Inc

Ray Irani $34.2 Occidental Petrol.