With apologies to Charles Dickens, these are the best of times for Edward Breen, chief executive officer of Tyco International Ltd. and the worst of times for his shareholders.

In its proxy filed on January 18, Bermuda-base Tyco disclosed Breen's compensation for its fiscal year ended September 30, 2007. By my calculations, his total pay package comes to $33.3 million, up 105 percent from his $16.2 million pay package in the preceding year. (The $33.3 million excludes a $1.3 million increase in the present value of Breen's pension because the comparable figure for the year earlier wasn't available under the old proxy disclosure rules.)

Knowing only that $33.3 million figure, readers might suppose that Tyco had a brilliant year, and that the company's compensation committee was doing what was right: piling rewards on a superbly performing CEO.

It's true that Breen, 51, has done well for his shareholders, long-term. Between July 25, 2002, when he came on board, and the close on February 22, Tyco's annual total return was an excellent 24 percent. That compares with 11 percent for the Standard & Poor's 500 Index.

But we're talking here about his performance in 2007. While his total compensation package was in the mid-$30 million range, total return was 2.6 percent, almost 14 percentage points below the 16.4 percent return on the S&P 500.

Moreover, Tyco, which operates out of West Windsor, New Jersey, has continued to perform poorly past the end of its last fiscal year. Between September 30, 2007, and the close on February 22, total return was negative 9.3 percent, although that was a bit better than the negative 10.6 percent on the S&P 500.

Here are a few other dismal statistics for 2007:

• The net loss was $1.7 billion compared with net income of $3.6 billion for 2006.

• Diluted earnings per share were negative $3.52; they were positive $6.95 for the earlier year.

And here's how Breen's pay package swelled in 2007:

• While his base salary remained unchanged at $1.6 million, his bonus doubled to $3.2 million. It's hard to see how that should have been allowed to happen, given the dismal results for 2007.

• He received awards of free shares worth $11.5 million, up 52 percent from his year-earlier grant of $7.5 million.

• He also received stock options that I estimated had a present value at grant of $11.1 million, up 127 percent from a value of $5.5 million in 2006.

• And he received $912,000 in miscellaneous compensation, or a 66-percent increase over $549,000 for 2006.

On top of all that, Breen was given a new long-term incentive plan, which I estimate has a value at grant of $5 million. He has the opportunity to earn as many as 187,400 free shares worth $10 million at the time of their grant for his performance during the period beginning July 2, 2007, and ending June 30, 2010.

Payouts under this plan are predicated on a comparison of Tyco's total return during the performance period to that generated by the 56 companies comprising the S&P 500 Industrials.

If Tyco performs equal to or above the top quarter of the 56-company group, Breen receives the maximum number of free shares. His award is halved if Tyco performs in the middle of the group.

If Tyco ranks in the top 65 percent of companies, Breen still gets 20 percent of his maximum award. It is only when the ranking falls below that level that the award is finally killed.

So far, things aren't too auspicious for Breen. Looking at total return performance from July 2, 2007, through the close on February 22, Tyco ranks in the 13th percentile among the 56-company group, meaning that 87 percent of the companies outperformed Tyco. If that keeps up, Breen can at least use the new plan document to paper his den at home.

So how did Breen go from lovely long-term performance to poor short-term performance?

Well, you have to look first at what happened to the stock under his predecessor, Dennis Kozlowski, who is serving a prison sentence of eight-and-a-third to 25 years for grand larceny, securities fraud and falsifying business records.

On December 5, 2001, just seven months before Breen showed up, the stock closed at $93.23 a share. It then dropped to $15.89 on July 24, 2002, when Breen received a welcome-aboard option mega-grant covering 1.8 million shares.

As of this February 22, that mega-grant was $44 million in-the-money. But all of the five stock options he subsequently received were underwater as of the same date. The stock never did recover to its Kozlowski-era high. It reached a high under Breen of $57.05 on January 6, 2005, before declining to $40.05 on February 22. A lot of companies hit the performance skids in 2007, and many shareholders have taken heavy blows.

If Breen is an example of what's to come as the proxy season gets under way in the next week or so, then CEO pay may become a bigger issue in the 2008 presidential campaign than anyone imagined.