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With the recession showing no end in sight and the continuing spotlight on executive pay, many U.S. companies are cutting back on the annual bonuses and long-term incentives they pay their executives, according to Watson Wyatt’s survey of 264 companies.

Watson Wyatt’s survey on the effect of the economy on executive pay programs found that one in two companies (49 percent) plan to reduce the size of their executive bonus pool compared with last year. Of these companies, 30 percent expect a cut of up to 20-to-50 percent, 23 percent expect a cut of 50 percent or more and 11 percent do not plan to pay any annual bonuses at all.

Almost one in four companies (23 percent) expect the dollar value of their long-term incentive grants to decrease in the next year, most likely as a consequence of the recent fall in the equities market. In terms of other long-term compensation vehicles, companies are putting less emphasis on stock options and relying more on performance-based restricted stock in the coming year.