Stephen Case, $160 million man

America Online chief executive Stephen Case received nearly $160 million in compensation last year, surpassing his pay package of the previous year nearly sixfold.

Case raked in $158 million in fiscal 1998 by exercising 2.7 million AOL options. His base pay, meanwhile, rose 57.3 percent to nearly $427,000, and he earned a $750,000 bonus to boot, according to the company's proxy filed today with the Securities and Exchange Commission.

In addition, AOL board members have approved a 40.6 percent increase to Case's base salary for fiscal 1999, raising it to $600,000, meaning that Case's base pay has more than doubled in just a two-year period.

"Doubling an executive's salary is unusual for that time frame, but he's done some unusual things for the company under his stewardship," said Charles King, a compensation expert and principal with William M. Mercer.

Last year, for example, AOL completed its acquisition of CompuServe's online services business, and exceeded both the earnings and operational-initiative performance goals set by its board of directors, according to the filing. An AOL spokeswoman referred to these benchmarks listed in the proxy in response to a request for comment on the company's decision to increase Case's pay.

At the same time, the online giant saw its revenues rise 54 percent over the previous year to $2.6 billion, while its operating income rose to $134 million from a net loss a year earlier.

But one compensation expert noted that a base salary of $600,000 actually may be considered low for someone running a company the size of AOL.

Perhaps to make up for that, in fiscal 1998 Case received a grant of 1.3 million options, with a value of $18.8 million based on a 5 percent appreciation up until their expiration date. The vast majority of the options--1 million--have a strike price of 50 a share. AOL has traded as high as 140.5 and as low as 32 during the past 52 weeks.

The year prior to that, Case's overall compensation package stood at a mere $26.9 million, ranking him second behind former Intel CEO Andrew Grove, who took home a total pay package of $52.6 million during the same year.

Robert Pittman, AOL's president and chief operating officer, received a total pay package of $5.3 million for fiscal 1998, according to the SEC filing.

That figure translates to a 61.7 percent increase to Pittman's base pay, bringing it up to $541,665. The executive also received a $750,000 bonus, in addition to other compensation for housing and moving expenses.

But, like Case and a number of other tech executives, the bulk of his compensation came from cashing in options. He received $3.89 million for cashing in 50,000 options.

Pittman also was granted 900,000 additional options, with exercise prices of 32.25 and 50 a share. Based on a 5 percent appreciation, those shares are valued by the company at $12.95 million.

The filing also revealed that Pittman's employment contract calls for reimbursing the executive for flight hours and the use of a co-pilot on those occasions when he finds its easier to use his personal aircraft rather than commercial airlines for company travel. AOL, however, is not responsible for maintaining the aircraft.

AOL officials were not immediately available for comment.

(Intel is an investor in CNET News.Com)