* Earned C$3.836 million in total compensation
* Follows quarterly profit below expectations
TORONTO, March 30 (Reuters) - Sun Life Financial (SLF.TO), Canada's No. 2 life insurer, said on Tuesday its chief executive saw his total compensation slashed by 42 percent in 2009 after he gave up his bonus for a second year in a row.
CEO Donald Stewart earned C$3.836 million in total compensation in 2009, Sun Life said in a management information circular published on Tuesday. That compared with total compensation of C$6.577 million in 2008.
Stewart opted to take only half his typical long-term incentive grant, taking options but forgoing shares.
"Mr. Stewart recommended to the board that he forgo an AIP (annual incentive plan) payment for 2009 in light of the continuing credit problems and overall financial results below expectations," the company said.
Sun Life reported quarterly profit in February that was below analyst expectations, even though it was double the year-earlier figure.
"The challenging economic environment that continued throughout 2009 had a negative impact on our financial results," the company said. "Notwithstanding solid individual performance, our 2009 performance resulted in our named executive officers earning compensation that was below target."
In contrast, Manulife Financial Corp (MFC.TO) said last week it paid rookie Chief Executive Donald Guloien C$9.7 million in 2009, a year in which North America's largest life insurer cut its dividend as it struggled to right itself after the financial crisis.
Manulife's board of directors said that Guloien, who took the helm last May, had done "an excellent job in extraordinary circumstances" despite making moves that sent the company's shares down and annoyed investors.
Canadian insurers are still wrestling with repercussions from the drop in value of their long-term assets, but stock market gains, a brighter economic outlook and a rebalancing of long-term liabilities should mean a brighter 2010. (Reporting by Pav Jordan; editing by Rob Wilson)