Freeport-McMoran CEO's pay increases 76 percent

AP News
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Posted: Apr 29, 2011 6:12 PM
Freeport-McMoran CEO's pay increases 76 percent

The compensation package for Freeport-McMoran Copper & Gold Inc.'s CEO jumped 76 percent last year as the improving global economy sparked robust demand and higher metals prices, according to an Associated Press analysis.

Richard C. Adkerson got $35.3 million, primarily in stock grants and options awards valued at $21.2 million when they were granted, according to AP calculations based on a filing the company made Thursday with the Securities and Exchange Commission.

That's compared with his compensation package of $20.1 million for 2009, when the Phoenix mining giant was still struggling from the effects of the recession.

Adkerson, who also is president of Freeport-McMoran, was rewarded for last year's improvement in the company's financial performance, which was driven by higher copper and gold prices and stronger demand, particularly in faster-growing, developing countries such as China.

For the year, Freeport-McMoRan's net income was $4.3 billion, or $9.14 a share, compared with $2.5 billion, or $5.86 a share in 2009. Revenue rose nearly 28 percent to $18.98 billion.

Adkerson, 64, received a 2010 base salary of $2.5 million and a $10 million performance-based cash bonus.

He also received $1.77 million in company perks and personal benefits, including financial and tax advice worth $20,000, use of the corporate aircraft worth $242,279, security and cars worth $179,771 and $1 million in contributions to an employee savings plan.

In 2009, Adkerson received a base salary of $2.5 million, options awards valued at $6.78 million, a $10 million cash bonus, $813,223 in other compensation and no stock grants.

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 SEC.

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.