By Frank Maley

Ken Thompson wasn’t the only chief executive of a big Tar Heel company forced out in the past year, and given the pain shareholders are feeling, more might go. Forty-eight of the 75 largest public companies based in North Carolina produced a negative total return for shareholders in their latest fiscal year. Many have continued to struggle, and some of those with positive returns ended their fiscal year before December, when the economy was stronger, and have lost value since.

Among the biggest earners, CEO pay moved in the same direction as company performance, according to information compiled by the Charlotte office of human-resources consultant Findley Davies Inc. Bank of America Corp. and Wachovia Corp. watched profits plummet and posted negative total returns. Pay for their CEOs fell, too. At BofA, Ken Lewis saw his bonus shrink 35%; overall pay, 7%. Thompson’s bonus withered from $5.2 million in 2006 to zero. His overall pay fell 23%. And eventually, he lost his job. But right behind them was Mackey McDonald, who retired from apparel maker VF Corp. earlier this year. His cash income — salary and bonus — shot up 22% and total pay increased 16% while VF’s total return fell 14%. Boosting cash pay in the face of negative total returns wasn’t an anomaly. Almost half of the companies with CEOs on the job at least two fiscal years did so.

In some cases, the CEO might have hit internal benchmarks that helped keep the company profitable — VF’s net income rose 11% — or avoid a bigger loss, yet the company was still punished by Wall Street because it was in a struggling industry or other external factors. “There are an enormous amount of variables that go into these decisions,” says Hank Federal, principal and market leader for Findley Davies’ Southeast practice. “But when a shareholder receives this type of information, they’re not going to care about all the internal nuances. They’re saying, ‘I lost a dollar a share, and my board thought it proper to increase executive comp.’ And they’re not going to understand that.”