Last fall, I called out several CEOs as cowards or heroes for their executive compensation. Given Starbucks' (NASDAQ:SBUX) pay plans for 2009, I'm still not sure which category CEO Howard Schultz belongs to.

In October, I criticized Schultz for his handsome pay package, even as his company closed stores, cut employees, and turned in lackluster sales earnings. As it turned out, Schultz had asked Starbucks' board to reduce his pay. My bad!

But wait -- how bad was my bad? Schultz's targeted base salary was cut to $643,954, and after he asked for reduced compensation, he was technically paid just $6,900 for the remainder of the 2009 fiscal year, from April 1 through Nov. 30. However, he also received a $1 million bonus. Add in restricted stock and options, and his total compensation added up to $12.1 million, a 25% increase from fiscal 2008. Not bad for a guy supposedly taking a major pay cut.

A tarnished shine
True, restricted stock can't be tapped at will (although it certainly does have monetary value). But Starbucks' decision to hand Schultz a $1 million bonus still floors me. According to the company, management received:

… discretionary bonuses to reward ... executive officers for their contributions to the Company's strong fiscal 2009 performance during extraordinarily challenging times that were not adequately reflected in the payout calculations under the Executive Management Bonus Plan.... In addition, the Compensation Committee approved a discretionary bonus for Mr. Schultz as a result of the strong financial results for fiscal 2009 as well as Mr. Schultz's leadership during a transformational year for the business, even though he did not participate in the Executive Management Bonus Plan for fiscal 2009.

A year ago, before he cut his salary, Schultz pledged that he wouldn't take a bonus. Whatever happened to that promise? And for fiscal 2010, Schultz's base salary will now increase to $1.3 million.

Although I admire Starbucks' ability to increase profits in a difficult environment, it's still been closing stores and cutting workers, cleaning up the mess of years of overexpansion and competitive influences from the likes of McDonald's (NYSE:MCD), Caribou (NASDAQ:CBOU), and Green Mountain Coffee Roasters (NASDAQ:GMCR). Despite its surging share price, I'd argue that in many ways, this wasn't a great year for Starbucks. And while the company has admirably increased its profit over the last 12 months, its revenue has fallen 3.4% in that time frame.

Parasites bite
Disappointing, disconnected moments in CEO pay are hardly rare. I called out Abercrombie & Fitch (NYSE:ANF) last year for having an extremely highly paid CEO despite a clearly suffering business. That's a far worse reality disconnect than Starbucks seems to suffer.

Remember that even though leaders at some companies, such as Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL), receive $1-a-year salaries, they still get stock, options, and all sorts of other perks and goodies, making their apparently frugal compensation misleading.

While restricted stock compensation represents at least a nod toward encouraging long-term performance, I far prefer the way The Corporate Library's Nell Minow thinks. When she presented her views on corporate governance to Fool HQ last year, she argued that CEOs should be prevented from selling stock in the companies they lead until three years after they leave their posts.

If you think this stuff doesn't affect shareholders like us, think again. Corporate governance watchdogs have long cast a baleful eye on excessive CEO pay. Minow said excessive compensation is the best predictor of investment, litigation, and liability risk.

Last month in The Wall Street Journal, Jason Zweig reported on two new studies, which imply that the more a CEO gets paid, the less shareholders earn. Those findings defy the conventional wisdom that lucrative pay encourages or even guarantees strong future job performance.

Everyone should be paid accordingly for a job well done. But shareholders (and corporate boards!) shouldn't allow CEOs to always cash in, whatever their accomplishments, with weak and often flexible standards to justify why they're raking it in. At some point, that attitude simply builds an entitled, parasitic economy, where supposedly powerful folks always win, regardless of how well (or ethically) they play the game.

No more business as usual?
Maybe I'm being too hard on Schultz, given the challenges Starbucks faced last year. Or maybe I'm not being harsh enough, since his supposed pay cut didn't end up being much of one at all.

On a wider scale, I truly believe that excessive CEO pay is a destructive influence. It can only hinder our much-needed efforts to encourage real merit in corporate America.

Should Schultz take another pay cut? Does he deserve his cushy paycheck this year? Lend us your insight on the topic in the comment boxes below.