Dean A. Scarborough, chief executive of adhesive label and office products maker Avery Dennison Corp., received compensation last year valued at $6.4 million, more than three times the value of his 2007 compensation, according to an Associated Press calculation of figures disclosed Friday in a regulatory filing.
Much of it came in stock options, however, that currently have little value.
Dean A. Scarborough, 53, received a salary of $945,000, slightly higher than the previous year's salary of $916,000. His incentive plan compensation increased nearly 60 percent to about $1.33 million.
Scarborough, who has led the Pasadena, Calif., company since May 2005, received perks valued at $137,811, up from $119,929 in the previous year. Included in his perks were $5,598 for using company chartered aircraft, $30,000 as car allowance, $20,000 for financial planning and $55,325 as company match on deferred compensation.
The CEO also received stock awards and options valued at about $4 million at the time they were granted. However, Avery Dennison shares are now trading at less than half the level of the options' strike price of $52.12. That means those awards have little value absent a substantial rebound in the price of the stock, which last year fell 38 percent.
In 2007, Scarborough received compensation valued by The Associated Press at $1.9 million, a pay package that did not include any stock awards or options.
Last year the recession hurt company results. Avery Dennison reported a 2008 profit decline of 12 percent to $266.1 million, or $2.70 per share, from $303.5 million, or $3.07 per share, in 2007. Revenue rose last year by 6 percent to $6.71 billion.
"Avery Dennison generated record free cash flow in 2008, despite increasingly challenging business conditions in the retail sector and the effects of the broader economic slowdown," Scarborough said in January when the results were released.
The Associated Press' compensation formula aims to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
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