Wall Street’s top chief executive officers got their largest pay packages since 2000 after the five biggest independent securities firms posted record profits last year and handed out more restricted stock.

Merrill Lynch & Company’s Stanley O’Neal was the best-paid for a second year, pulling in $32 million. Almost all of that came in restricted stock, which vests over time. Morgan Stanley’s Philip Purcell, 61, got the biggest raise, a 45% jump to $22.5 million. Bear Stearns yesterday said James Cayne’s pay fell 8.5%, excluding earnings from deferred compensation.

Messrs. O’Neal, Cayne, Purcell, Goldman Sachs Group’s Henry Paulson, and Lehman Brothers Holdings’ Richard Fuld each have earned more than $100 million in five years, more than their counterparts at the largest industrial companies. Goldman and Merrill paid out more restricted stock in 2004 as regulators prepared to force American companies to account for stock options as an expense starting this June.

“It’s always good when senior executives get more stock because they’re willing to put their money where their mouth is,” said Alan Johnson, president of Johnson Associates, a New York based compensation consultant. “It tells you how optimistic they are about where the business is heading.”

The five firms earned a combined $17.6 billion last year. Earnings are forecast to rise 4% to $17.9 billion in 2005, led by Morgan Stanley, according to the average estimate of analysts surveyed by Thomson Financial.

Merrill, the world’s largest securities firm by equity capital, paid Mr. O’Neal, 54, $31.3 million in restricted stock and $700,000 in cash, a 14% increase from 2003. Of Mr. Paulson’s $29.8 million, $29.2 million was in restricted stock and $639,000 in cash. Mr. Paulson, 58, got a 39% raise.

Messrs. Fuld, Cayne, and Purcell each received about 40% of their pay in cash salary and bonus, rather than in some form of stock. Combined, the five CEOs received $135.3 million.

“At least in Goldman and Merrill the bulk of those packages, although large, was in stock,” said a management-compensation consultant in White Plains, N.Y., Brian Foley.

Restricted stock made up an average of 67% of the five chiefs’ pay, up from 48% in 2003.

The shares are intended to match an executive’s interests with those of the firm’s investors. Goldman, for example, is making Mr. Paulson wait until the end of fiscal 2007 to claim 60% of last year’s restricted-stock award. Once the shares vest, they become common stock.

After Merrill, Morgan Stanley and Goldman rank as the second- and third largest American securities firms, with Lehman no. 5 and Bear Stearns sixth.

Mr. Cayne, 71, got $24.7 million in salary, bonus, options, and restricted stock, with an extra $6.5 million in earnings from the firm’s capital accumulation plan, or CAP. That’s a drop from $27 million in 2003, excluding $12.3 million in CAP earnings.

Under the plan, Bear Stearns gives an annual bonus to about 700 executives and senior employees in the form of units that track the company’s stock price and are usually converted into common shares after five years.

Taking his CAP payouts into account, Mr. Cayne made $149 million in the past five years, 37% more than Mr. O’Neal. The comparison excludes the gains made on other holdings such as options.

Lehman’s Mr. Fuld, 58, took home $26.3 million, up 33% from 2003.

Spokesmen for the five New York firms declined to comment on pay.

The premium that Wall Street’s top firms pay their chief executives probably doubled in 2004 to as much as 25% more than the $15 million to $20 million that leaders of the 50 biggest American industrial companies get, according to Mr. Johnson. Nonfinancial companies often give more perks such as pensions and corporate-jet use.

Wall Street firms reward leaders who make the final decisions in their “brutally competitive” industry, said Mr. Johnson. All the firms have had “near death experiences,” as rivals such as Drexel Burnham Lambert, Salomon Brothers, and Donaldson, Lufkin & Jenrette went bust or were swallowed in acquisitions, he said.

Of the five firms, only Morgan Stanley gave its CEO a raise greater than last year’s increase in net income. While Mr. Purcell’s pay rose 45%, net income gained 18%.

The average increase in compensation was 25% compared with an average rise in earnings of 28%.

The pay gains outpaced other financial measures. Shares of the five companies rose an average of 10.8% during the firms’ fiscal years. Only Mr. Cayne’s pay failed to increase at a rate greater than the stock price. Bear Stearns’s shares were up 35% in the fiscal year ended November 30, 2004, the best performers in the 12-member Amex Broker/Dealer Index.

Revenue at the firms increased an average of 18% and compensation per employee rose a fifth on average.

Bear Stearns’s compensation committee, led by Carl Glickman, said in a proxy filing that it rewarded Mr. Cayne for the firm’s “strong absolute and relative performance.” The equity component of Mr. Cayne’s pay means his future benefits “will depend on the future performance of the company and the value of its common stock.”

Morgan Stanley’s committee in charge of compensation, chaired by Charles Knight, said in his firm’s proxy that pay should be performance-based, largely in equity and perceived as fair. Mr. Purcell was rewarded for qualities such as “individual leadership,” it said.

Starting this June, companies will have to calculate the market value of employee stock-option awards and count them as an expense when reporting earnings. The Financial Accounting Standards Board approved the rule in December, defying protests from technology companies, the biggest users of stock options.

An option gives a holder the right to buy a share of the company’s stock at a fixed price. Like restricted stock, most options vest over time, limiting an executive’s ability to benefit from a short-term rise in the share price.

Messrs. Fuld and Cayne were the only two of the five CEOs to receive stock options last year.

Goldman boosted net income 52% in fiscal 2004 to $4.6 billion, the biggest rise among the five firms. It also increased compensation per employee the most, by 24%.

Merrill had the smallest gain in both profit and compensation per employee, at 16% and 2.7%, respectively.

Pay for the top five Wall Street CEOs peaked at a total of $153.5 million in 2000, led by Mr. Purcell with $37.1 million. Former Merrill CEO David Komansky, who got $32.6 million that year, was replaced by Mr. O’Neal at the end of 2002.

Combined, pay for the leaders of the five firms fell 48% in 2001 and 6% in 2002, as earnings fell 44% in 2001 and rose 14% the next year. Compensation rose 58% in 2003, as profits rose 42%.

Bear Stearns’s Mr. Cayne and Lehman’s Mr. Fuld are the longest-serving chief executives in the group, having held their positions since 1993 and 1994, respectively. Mr. Purcell became Morgan Stanley’s CEO in 1997, when the firm bought Dean Witter. Mr. Paulson has run Goldman since 1999, the year the firm went public.

“These guys have all been in the seat for a while and they’re looking at realizing the big pay-days,” said Henry Higdon, chairman of the Higdon Group, a New York-based executive search firm. “Financial services have been in recovery mode and they may think: ‘Let’s harvest this.'”