Procter & Gamble Co. Chief Executive A.G. Lafley's total annual pay fell by nearly 15 percent after the company's internal financial performance slowed at the end of a three-year incentive plan, a regulatory filing Friday shows.
Overall, Lafley received compensation totaling nearly $25.6 million for the company's fiscal year ended June 30, compared to the previous year's $30.1 million.
Nearly 90 percent of compensation for the chairman and chief executive of the world's largest consumer products company was tied to topping earnings and sales growth targets and other financial goals. Lafley's salary stayed at $1.7 million, while his annual bonus was increased by $500,000 to $4 million, the company's proxy statement filed with the Securities & Exchange Commission stated.
He received nearly $19 million in stock and option plan awards, and the company's compensation committee stated in the filing that it "has tremendous confidence in Mr. Lafley's ongoing leadership, based in part on his sustained performance and his commitment to strengthen the company for the future."
His compensation declined in the company's business growth plan, which has annual targets for earnings per share growth and a proprietary formula for rate on return involving growth figures and cash flow in what the filing describes as "demanding" goals. While Lafley received a total $11.1 million under the plan in its first two years, the final year caused the three-year total to finish at 120 percent of plan targets, earning him a total of $12.2 million. That left him with compensation of $1.1 million for this year, under the plan's rules.
"This reflects that the company's compensation programs are working as described _ that we pay for performance," the filing stated.
Had the three-year total fallen below targets, Lafley would have been required to pay back the difference from his first two payments. The filing stated that Lafley's salary has been increased to $1.8 million and another bonus program incentive has been increased for the current fiscal year. New three-year business growth plan will be set in September, the company said.
Since Lafley became CEO eight years ago of the company that makes Pampers diapers, Tide detergent, Olay skin care and other products, annual earnings per share growth has averaged 13 percent and annual sales have more than doubled to $83.5 billion.
Over the last three years, P&G has acquired and absorbed the Gillette Co., adding shaving products and batteries to its brands. Gillette's Fusion shaving system recently became the 24th P&G brand to hit $1 billion in annual sales.
The company has also pushed to build business in emerging markets, which now account for some 30 percent of total sales.
Lafley, 61, also was given other compensation of nearly $344,000. Most of that, more than $225,000, was for personal use of the company plane, which Lafley is required to fly on under company security policies.
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. This figure may vary from the total compensation of company's report.
P&G's annual shareholders meeting will be Oct. 14 in Cincinnati.
___
On the Net:
http://www.pg.com
Terms & Conditions
RSS Headlines
Fool UK