Insurer Allstate Corp. gave its CEO a pay package in 2010 that was worth $8.6 million, a cut of about 8 percent from 2009, according to a company filing made Wednesday with the Securities and Exchange Commission.
The decline came in a year when the Northbrook, Ill.-based property and casualty insurer's net income rose 9 percent but its operating profit fell 18 percent.
CEO, Chairman and President Thomas Wilson received $9.4 million in 2009, according to an Associated Press analysis of the filing.
In 2010, Wilson, 53, earned a base salary of $1.1 million, down marginally from 2009. His annual base salary officially rose in March 2010, but the salary he actually received fell slightly from 2009, because that year's salary included some of his 2008 earnings, the filing said.
Wilson's performance-based compensation also was $1.1 million, down 36 percent from the $1.7 million he received in 2009. His 2010 stock and options were worth $6.4 million when they were granted, compared with $6.5 million the previous year. According to the filing, Wilson's performance-based incentive fell because Allstate's profit was hurt by high catastrophe losses, a decline in the company's share of the auto insurance market and a decline in investment income.
Wilson's other compensation of $75,322 included $37,438 for personal use of company aircraft, $4,900 in retirement contributions and $32,984 for items such as life insurance premiums, cell phones, tax preparation services, financial planning, executive physicals, transportation and supplemental long-term disability coverage.
For all of 2010, Allstate reported net income of $928 million, or $1.71 a share, up from $854 million, or $1.58 a share, in 2009. But its revenue slipped to $31.4 billion from $32.01 billion, and its operating income fell to $1.5 billion from $1.9 billion. That drop reflected the catastrophe losses and a rise in auto insurance claims and lower customer renewals on auto insurance in several states. Allstate's investment income also fell as interest rates declined.
The Associated Press formula isolates 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 sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission. Those totals reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.