A sharp increase in stock awards drove executive compensation at Hawaii’s top companies to a record high last year, with four CEOs cracking the $6 million mark for the first time.

The average compensation for chief executive officers at the top 11 publicly traded firms in Hawaii rose to $3.21 million in 2010 from $1.75 million the year before, according to a Star-Advertiser analysis of Securities and Exchange Commission filings. The 2010 average compensation topped the previous high of $3.1 million in 2007.

Territorial Bancorp Inc. CEO Allan Kitagawa, who led the company’s transition into a publicly traded financial institution, topped the list of Hawaii executives with a pay package of $6.78 million in 2010, up from $2.21 million in 2009. The biggest chunk of Kitagawa’s compensation — $4.25 million — consisted of stock grants and stock options. Territorial Bancorp is the parent of Territorial Savings, the state’s fifth-largest bank.

Besides Kitagawa, the members of the $6 million compensation club were Hawaiian Telcom’s Eric Yeaman at $6.72 million, Constance Lau of Hawaiian Electric Industries at $6.57 million and Hawaiian Airlines CEO Mark Dunkerley at $6.35 million.

The average compensation package for CEOs at companies making up the Standard & Poor’s 500 stock index was $9 million in 2010, up 24 percent from 2009, the Associated Press reported.

Kitagawa’s base salary of $817,993 was the highest of Hawaii CEOs. The company said his salary was based in part on his contribution to the company after more than 20 years as CEO and his role in taking the bank public in 2009.

Dunkerley had the highest amount of equity-based compensation at $4.68 million. It was the first time in three years that he received any stock awards from the company. The 2010 award was part of a new employment contract for Dunkerley that will enable him to collect the shares over a three-year period if the company meets certain financial benchmarks, such as profitability and share price.

Yeaman was the only CEO to receive a traditional, or discretionary, bonus. Yeaman, who turned down $609,000 in bonus payments to which he was entitled in 2009, was granted a $2.2 million bonus last year in recognition of his work to bring the company out of bankruptcy, according to the company.

"Hawaiian Telcom’s successful emergence from bankruptcy, its financial stabilization and its return to profitability are due to extraordinary contributions by its key leaders, who worked tirelessly to achieve these results," said Richard Jalkut, chairman of Hawaiian Telcom’s Board of Directors on Compensation.

"Thus, it is only appropriate to recognize and incent these key leaders to continue to deliver growth and improvement into the future. Sound business practices demand that companies — public and private — regularly analyze and review their compensation programs to ensure their ability to attract and retain top-notch talent at all employee levels," Jalkut said.

Five of the companies on the list added new CEOs in 2010. Stanley Kuriyama took over the helm of Alexander & Baldwin, replacing Allen Doane, who had led the company for 11 years.

Kuriyama’s 2010 compensation of $3.66 million was "significantly less" than he could have received as he requested a cap in his cash and equity awards, according to the company. In addition, almost a quarter of his compensation was related to "change in pension value and non-qualified deferred compensation," which represent changes in the value of his retirement fund, the company said.

The only Hawaii top executive to report a decline in compensation was Warren Haruki, interim CEO at financially struggling Maui Land & Pineapple Co. MLP posted losses of $80 million in 2008 and $123 million in 2009 before turning a $25 million profit in 2010 after reducing expenses by doing things like cutting retiree benefits.

Of the various components that make up an executive’s pay package, the biggest increase for Hawaii’s top four CEOs was in restricted stock awards, which accounted for about two-thirds of their gain in compensation. Most of the Hawaii CEOs did not receive stock awards in 2009.

The stock grants are not guaranteed, however. Regulations require companies to report the full fair value of the stocks in the year that they are granted even though executives can’t take possession of the shares until the expiration of a vesting period that can run anywhere from one year to six years. The stocks can gain or lose value based on market conditions during that period. In addition, most companies link some of the shares to an executive’s performance.

Other pieces of executive compensation that companies must report to the SEC include base salary, cash bonuses, change in pension value and any deferred compensation that the company can’t deduct from its taxes.

Companies have shifted over the past decade to more of an equity-based executive compensation model under the assumption that it better aligns the interests of executives with shareholders, said Michael Esser, managing director in the Los Angeles office of Pearl Meyer & Partners, a compensation consulting firm.

Esser also said the average increase in executive compensation for Hawaii CEOs was on par with the growth in pay packages on the mainland earned last year. "It’s not surprising total compensation went up with the rebound in equity values. That’s the once piece of compensation that has increased the most," Esser said.