The chief executive of Tiffany & Co., the jewelry and gift chain known for its iconic turquoise boxes, received a pay package worth nearly $7.1 million for 2010, up 13 percent from 2009, according to an analysis by The Associated Press.
A document the company filed Friday with the Securities and Exchange Commission shows Michael J. Kowalski, 59, received a base salary of $958,957 and a performance-based bonus of nearly $1.6 million.
The bulk of his award came in the form of stock and option grants worth $4.4 million when they were granted.
Kowalski, who joined Tiffany in 1983, became CEO in 1999 and added the title of chairman in 2003, received other compensation worth $167,124, including $147,072 for a life insurance premium.
In 2009, Kowalski's total pay package was worth about $6.3 million.
Tiffany, based in New York, benefited from the quick rebound the luxury sector made following the recession. Its net income climbed 39 percent in 2010, while its annual revenue rose 14 percent to $3.09 billion.
Its shares rose 45 percent during the year.
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.