Some shareholder activists, ranging from labor unions to church
groups, have supported "say on pay," which requires boards of directors
to let their shareholders take annual advisory votes on compensation.
Other proposals call for shareholder votes on large severance packages
and better disclosure of conflicts of interest among compensation
consultants that work with a company.

Even President Obama has weighed in on the matter, saying last
week that his administration would impose executive compensation
restrictions at some firms receiving federal aid.

But any reforms must address one fundamental problem, experts
said: Companies don't always make it easy for shareholders to
understand what their executives make. Three years ago, the SEC adopted
rules that were supposed to make companies' executive compensation
structures more transparent. But more transparency has actually bred
more confusion, some experts said.

"We've got both a blessing and a curse with the changes that
have been made with disclosure," said Timothy J. Bartl, vice president
and general counsel at the Center on Executive Compensation.

"On the one hand, we have a lot more information about what
these programs are, and on the other hand, we have much more
information to decipher."

Much of that information is contained in the company's annual
proxy statement, which can be found on both the company's and the SEC's
Web sites. But just because the information is all there doesn't mean
you'll understand what it all means. You'll also need to pull out your
calculator. And don't think you can get away with skimming through the
proxy. You can miss an awful lot if you ignore, say, the footnotes.

"Particularly large companies in the S&P 500 have some of
the most complicated compensation structures you can imagine," Hodgson
said.

A good place to start is the section often labeled the
compensation discussion and analysis. "It basically takes the reader
through the philosophy of a company, the different components of
compensation, how they work, how they compare to the marketplace," said
Steven Hall, managing director for pay consultancy at Steven Hall &
Partners.

The CFA Institute Centre for Financial Market Integrity in
Charlottesville, Va., recommends that investors be leery of companies
that reward executives despite poor company and share-price performance
as well as those that give executives outsize severance packages.
Shareholders should also compare the company's payment structure to
those at companies of similar size and marketplace.

Keep in mind, though, that sometimes pay raises or bonuses can be justified.

"Just because the share price has gone down doesn't mean the
senior management hasn't been making good decisions, doesn't mean it
hasn't done things to make the company stronger than it would have been
going into the recession," said Jim Allen, director of the capital
markets policy group for the CFA Institute Centre. "But at the same
time, what's significantly aggravating to investors is when you have a
company that has made all sorts of bad decisions ... yet senior
executives come out of this without the same hurt that shareholders or
other stakeholders are feeling."

Once you get past the philosophical discussion, you can turn to the number crunching.

Let's go back to our Disney example.

If you look at the summary compensation table in the proxy
statement, you will see that Iger made $30.6 million in fiscal 2008.
"The table itself looks like a total number of what the executive took
that year, except that it's not," Bartl said. "It mixes apples and
oranges."

The problem, he said, is that the table joins the current
year's salary and incentives with long-term incentives such as stock
awards that the executive cannot cash out for years.

Iger, for example, had $7.8 million in stock awards and $6
million in option awards, both of which are included in total
compensation.

Compensation experts Hodgson and Crystal subtracted those
totals because they were a mix of awards from previous years that were
intended to be spread out over time. That left Iger with $16.8 million.

Hodgson then moved to the fiscal 2008 option exercise and
stock vested table, which shows the number and value of the shares that
actually vested, or were exercised. In Iger's case, it was 150,797
shares worth $4.6 million. The total compensation: $21.4 million.

Crystal went a step further. He added $3.4 million in option
awards from the grants of plan-based awards table, which shows what
Iger got in free stock and option shares for the year. He also added
awards that were granted in fiscal 2008 but would have future payouts.
That included $5.9 million in future estimated payments for restricted
stock units listed under the column for estimated future payouts under
equity incentive plan awards. Then he added 3 million options awarded
in 2008 but are scheduled to vest through 2013. Worth $25 million,
those options were given to Iger as an incentive to enter into an
extended employment agreement.

Hodgson described the differences among the three approaches.
The SEC total looks at all the equity awards that might have vested
during the year. Included in that could have been awards from the past.
Crystal's approach looks at target pay. It takes into account awards
made during the fiscal year even if they cannot be cashed out for
years.

Hodgson's approach, he said, comes up with a figure for the
cash at hand. "This is money that is in his wallet now. It's realized
compensation," he said.

Crystal explained why he counted awards that were granted in
2008 but might not be realized for years: "It's like saying part of the
bonus is 100 pounds of coffee. Someone says we don't count that because
she didn't drink it. But it's still sitting on your shelf."

Iger is not the only chief executive who has thrown
shareholders and executive compensation experts for a loop. The SEC
said J.P. Morgan Chase chief executive James Dimon made $27.8 million
in fiscal 2007, the most recent year available. But Crystal put Dimon's
compensation closer to $40.8 million because of current and future
payouts on stock and equity awards.

"It's not an exact science," Hodgson acknowledged.