The compensation of Hormel Foods Inc.'s chief executive fell 17.5 percent in 2009 to $6.3 million, according to an Associated Press calculation of figures filed with regulators.
Jeffrey M. Ettinger's incentive compensation fell, and he received smaller stock and options grants in a year when the maker of Spam and Hormel chili saw sales fall 3 percent but its profit rise as ingredient costs fell and its turkey unit improved.
Ettinger's salary was about $956,000, 4.8 percent more than in fiscal 2008, but his $2.9 million incentive was more than 17 percent lower than the $3.5 million he received last year, according to documents filed Wednesday with the Securities and Exchange Commission.
Ettinger's pay package included grants of restricted stock and options in fiscal 2009 that were valued by the company at $2.4 million the day they were made. The options have an exercise price of $30.39, while Hormel's stock price has risen since. Shares closed Wednesday down 8 cents at $37.90.
The stock and options Ettinger received in fiscal 2008 were valued at $3.1 million the day they were granted.
Ettinger, 51, received perks and other benefits totaling $56,049, down from $56,586 last year. This year's figure includes more than $40,500 for joint earnings profit sharing, almost $12,000 for company and personal use of a car, and nearly $2,300 for personal exams. Ettinger did not continue an air lounge membership, valued at $373, from at least the previous two years. He received no bonus, just like last year.
The Associated Press formula is designed 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.
Ettinger has been president and CEO of Hormel, which is based in Austin, Minn., since 2006. He joined Hormel in 1989 and has served as its senior attorney, a product manager and president of Jennie-O Turkey Store, the company's turkey unit.
Hormel and other food makers have benefited as consumers eat at home more to save money. Sales of its lower-priced foods like Dinty Moore stews and the canned meat product Spam have been rising for at least a year as consumers look for value, though the growth fell off in the fourth quarter compared with high growth a year earlier.
The company plans to boost its advertising in 2010 to persuade cash-strapped shoppers to pay extra for its pricier items, like microwave meals. Its revenue was disappointing in the quarter ending in October as sales of pricier items slumped.
Hormel earned $2.53 a share for fiscal 2009, while its revenue fell 3.3 percent to $6.53 billion. The company expects to earn 10 cents to 20 cents per share more next year than in 2009 as it continues to benefit from improvements in its turkey unit, where costs have fallen.