Hasbro increased Brian Goldner's base salary to $1.2 million from $1 million and added two one-off retention awards, on top of the annual equity payments.
The firm has also awarded Goldner 125,000 performance share units to be earned based on the toy maker's financial performance from 2010 to 2012.
The executive also took 687,000 stock options, carrying an exercise price of $38.39 a share. The options will be paid in five instalments from March 2011 to 2014.
The agreement replaces a May 2008 contract, when Goldner was promoted to his current post from chief operating officer. His original employment contract was set to expire in May 2011.
In the restated contract, Hasbro said it wished to secure an "enhanced non-competition commitment" from Goldner.
Since Goldner became chief, Hasbro shares have risen by 14 per cent. He has strengthened the firm's ties with Hollywood movie studios and struck a joint-venture deal with Discovery Communications to launch a new kids' cable-television network.