The chief executive and chairman of Eastman Kodak Co. saw his pay package plummet 66 percent last year as the photography pioneer struggled to make headway in its long and painful digital transformation.
Antonio Perez, 65, received total compensation valued at $3.5 million in 2010, down from $10.2 million in 2009, according to an Associated Press analysis of a proxy statement filed Wednesday.
His performance-based cash bonus slumped 80 percent to $341,000 and the value of his stock awards when they were granted fell 72 percent to $1.7 million, from $6.2 million in 2009. In 2009, he received stock options valued at $1.1 million when they were granted, but he received none last year.
His compensation also included $320,194 in perquisites, or "perks," up 38 percent from 2009. They included $309,407 for personal use of company aircraft, $7,000 in financial counseling and $3,034 for home and personal security. His base salary of $1.1 million rose 11 percent from the previous year.
Since taking the helm in 2005, Perez's salary has remained unchanged, except in 2009 when it was reduced to $988,600. The company trimmed the salaries of top executives that year as the global downturn sapped demand for digital cameras, film and other photography products.
The dropdown in overall pay in 2010 reflects Kodak's inability to hit financial targets. Instead of a projected 5 percent to 9 percent rise in digital revenue, it posted growth of 1.4 percent. Its operational earnings of $369 million came in at the low end of a target range of $350 million to $450 million.
Excluding restructuring costs, Kodak also spent $248 million more in cash than it took in during what it predicted would be a break-even year. The 131-year-old company is pouring investments into four dynamic businesses, led by inkjet printing, and expects to cross over to profitability in 2012. In 2013, it expects to generate operational earnings of about $430 million on revenue of $7.2 billion.
Kodak's revenue fell 6 percent to $7.19 billion last year, and its losses widened to $687 million from $210 million in 2009. It took a $626 million charge in 2010 to write down the value of its shrinking film, photofinishing and entertainment division.
After a $3.4 billion overhaul from 2004 to 2007, Kodak's momentum was stalled by the recession. It is relying on leaner costs and patent-litigation payments to help see it through its transition. It trimmed its work force from 20,300 to 18,800 in 2010. In 2002, it employed 70,000 people.
Its shares rose 27 percent in 2010 to finish at $5.26. The stock gained 7 cents Wednesday to $3.47.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.