Heinz CEO’s pay rose in FY2011
Wednesday, July 6, 2011
H.J. Heinz Co. CEO William Johnson saw the value of his pay package increase 5 percent to nearly $15.6 million in the most recent fiscal year, according to an Associated Press analysis of a recent regulatory filing.
Heinz, which makes ketchup, Ore-Ida potatoes and other foods, gave Johnson a package worth $14.9 million in the 2010 fiscal year.
Johnson’s salary, stock options and awards were nearly unchanged from 2010, according to a document Heinz filed Friday with the Securities and Exchange Commission July 1. His salary remained at $1.25 million. The value of his stock and option awards rose $58 to remain at roughly $4 million.
The company increased his combined annual incentive pay and long-term performance award by 4 percent to $8.9 million. His other compensation, including perks such as life insurance, retirement savings contributions and personal use of the company aircraft, rose fastest — by 34 percent to $1.4 million.
Heinz’s profit rose 14 percent in fiscal 2011 to $989.5 million, or $3.06 per share. Its revenue climbed 2 percent to $10.71 billion.
The company, based in Pittsburgh, has faced many of the same challenges as its peers, including commodity cost increases. Heinz has maintained its profitability by improving its efficiency, raising some prices and focusing on growth in emerging markets.
“This is truly a case of pay for performance,” the company said in a statement.
Heinz delivered record sales, profit and operating free cash flow in a difficult economic environment while completing key acquisitions in Brazil and China to speed up growth, the company said. Johnson’s compensation “reflects the company’s exceptionally strong results and his leadership in driving the consistent growth and performance of Heinz over the last five years.”
The Associated Press executive compensation formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive’s stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
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