By Julie Wernau | Exelon’s John Rowe, CEO of the nation’s largest operator of nuclear power plants, saw his total compensation for 2009 fall 40 percent to $6.3 million, the company disclosed in documents filed with the Securities and Exchange Commission.

At the same time, the company announced it will freeze executive salaries for the first time since Exelon formed through a merger in 2000.

Rowe’s compensation decrease, attributed to falling short of company earnings per share goals in 2009, follows a hit to Rowe’s compensation last year. In 2008, Rowe exceeded his performance goals but saw his overall compensation cut in half as a result of a 32 percent decline in Chicago-based Exelon stock. Options and shares in Exelon stock represent a majority of Rowe’s compensation package.

Stock in Exelon ended 2009 at $48.87, down 12 percent over the year. The company valued compensation based on the value of the company’s stock when it was awarded on Jan. 25, 2010, when it was at $46.09. They assigned no value to stock options, which have been underwater since 2006.

Exelon’s executive compensation is based on a “pay for performance” model that is meant to align the interest of senior executives with that of Exelon customers and shareholders. According to the company filing, the company met 97 percent of its target for earnings goals as compared to 116 percent in 2008. Exelon executives receive bonuses in the form of stock awards and options for meeting or exceeding company and shareholder goals, and those bonuses increase based on meeting certain performance thresholds.

“We did not achieve our targeted earnings per share in 2009. But to our credit, everything that was within our control, we managed well,” said Vic Fonseca, vice president of compensation and benefits at Exelon.

In an effort to bring more value to Exelon shares, Rowe banked on two initiatives that failed to materialize in 2009. Exelon spent $50 million in a failed takeover attempt in 2009 for New-Jersey based NRG Energy Inc., before abandoning it July 21 after losing a shareholder vote.

Rowe worked to sell U.S. senators on the “cap-and-trade” approach (companies that pollute more would have to buy credits from those that pollute less) taking frequent lobbying trips to Washington — an approach that would be a boon to Exelon if the bill passes the senate because nuclear power generation doesn’t emit greenhouse gases and wouldn’t be subject to the caps. The bill is still being debated and Exelon has staunchly defended the proposal, bowing out of the Chamber of Commerce in 2009 over the chamber’s opposition to the plan.

In 2010, the company is cutting bonus compensation in half and reducing restricted stock grants for senior managers and long-term incentive awards for executives by a third. The company match for 401k contributions will be reduced from 5 percent to 3 percent.

“Last year, we saw a lot of companies that looked at that planned incentive, realized that performance targets were not being met and moved to discretionary incentive payouts,” said Paul Hodgson, senior research associate at The Corporate Library, a research and rating firm for corporate governance research, executive compensation data and investment risk analysis. “This seems like the proper response to this kind of situation.”

Since 2002, Rowe and his wife Jeanne have contributed more than $13.3 million to charitable organizations, primarily in Chicago, have contributed $20 million to the Rowe Family Charitable Trust to fund future gifts. In 2009, Rowe helped found the Rowe Elementary School, a new charter school in Chicago’s West Town neighborhood and increased charitable contributions over the previous year 37 percent to $3.3 million, according to Exelon.