Philip Morris International Inc., the world's second-biggest cigarette company, awarded its CEO Louis Camilleri a compensation package valued at more than $20.6 million in fiscal 2010, down 16 percent from fiscal 2009, according to an Associated Press analysis of a regulatory filing.
The pay package came in a year when the seller of Marlboro and other brands overseas saw its net income rise 14.5 percent to $7.26 billion and its net revenue excluding excise taxes grow 8.7 percent to $27.2 billion. It sold about 4 percent more cigarettes.
The compensation deal was disclosed Friday in an annual proxy filing with the Securities and Exchange Commission.
Camilleri's salary increased 14 percent to $1.7 million, and he received a performance-based bonus of more than $7.8 million. The value of his stock options and stock awards fell 29 percent to about $10.6 million.
The 56-year-old also was given other compensation worth $488,564, which included personal flights on company-owned planes valued at about $198,013, a car allowance of $26,747 and $7,073 for personal security.
In 2009, Camilleri's compensation was valued at $24.5 million.
Philip Morris International, which has offices in Lausanne, Switzerland, and New York, also announced that it will hold its annual meeting on May 11 in New York, where shareholders will elect 10 directors to its board.
They also will vote on two shareholder proposals, including one for the company to do a study on its marketing practices and the effect on low-income people's ability to spend money on food rather than tobacco.
Second only to state-controlled China National Tobacco Corp., Philip Morris International was spun off in 2008 from Richmond, Va.-based Altria Group Inc., owner of Philip Morris USA.
Camilleri was CEO of Altria in 2002, when it first embarked on a restructuring that led to the spin-off of Kraft Foods Inc., then the separation of the two cigarette makers.
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 AP 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.