Goodyear's new CEO sees compensation rise in 2010

AP News
Posted: Mar 08, 2011 8:43 PM
Goodyear's new CEO sees compensation rise in 2010

Goodyear Tire and Rubber Co.'s chairman, president and chief executive saw his compensation jump 69 percent to $8.5 million in 2010 as he assumed new leadership roles, according to an Associated Press calculation from a regulatory filing.

Richard Kramer, who became CEO on April 13 and chairman on Oct. 1, received a base salary of $929,924, an increase of 37 percent, as the company reversed a 2009 decision to freeze executive officers' salaries.

Still, the Akron, Ohio-based company reported a loss of $216 million, or 89 cents per share, for 2010 despite a 15 percent increase in revenues. The loss included a $160 million charge to close a 1,900-employee plant in Union City, Tenn.

Goodyear, the largest U.S. tire maker, noted that the company was operating in an uncertain environment in 2010 as the global economic recovery continued and prices for raw materials and energy rose. Goodyear said in compensating executives, it considered their actions to improve pricing and product mix and their plan to cut $1 billion in costs by 2012.

Kramer received stock and stock option awards worth $1.9 million, up from $1 million in 2009. He also received a performance-based cash bonus of $5.7 million, an amount based on the company's pretax earnings but not including one-time charges like the plant closing. That compared with a cash payment of $3.3 million in 2009.

Goodyear also reported $52,161 in perks for Kramer, including a home security system and two sets of tires annually.

Kramer took over for former chairman, president and CEO Robert Keegan, who retired as CEO and president on April 13 and as chairman on Oct. 1. Keegan's base salary consequently fell 25 percent to $922,500.

But Keegan still made $12.2 million in his final year at the company, primarily from a performance-based cash bonus of $8.5 million _ which was down slightly from 2009 _ and stock awards worth $2.5 million.

Keegan also received $254,125 in perks, including $118,269 in payment for accrued vacation time that wasn't taken before his retirement.

The AP's calculation of executive pay includes salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards as of the day they were granted. The calculations exclude changes in the present value of pension benefits, making the AP total different in most cases than the total reported by companies to the Securities and Exchange Commission.

Goodyear shares rose 78 cents, or 5.9 percent, to close at $14.12 Tuesday.