Outrage at excessive CEO pay has finally convinced a firm to change its chief executive’s compensation.

E*Trade Group Inc. has announced an agreement with chairman and CEO Christos Cotsakos on a new two-year contract that cuts his pay notably. He is also giving back US$21 million of last year’s US$77 million in pay. He’s returning US$6 million in cash and US$15 million in stock.

Under his new contract, he’ll receive no base salary, and will be paid by an annual bonus based exclusively on company performance. He’ll also see a significant reduction of severance pay. The firm says that the newly negotiated contract is aimed at completely aligning Costakos’ compensation with shareowner and stakeholder value.

“I have listened to shareowner concerns and want to dispel any doubt that my commitment to the success of this company is unwavering,” said Cotsakos. “I am eager to eliminate the distraction of the compensation discussion so that we can focus on the business of E*Trade Financial.”