Sara Lee Corp.'s CEO, Marcel Smits, received a pay package valued at nearly $5.7 million in his first year as head of the food and beverage company, according to a recent regulatory filing.
The company appointed Smits, 50, as its permanent CEO in January after its former CEO, Brenda Barnes, suffered a stroke. He joined the company in 2009 as its chief financial officer and was appointed interim CEO in May of 2010.
The company paid Barnes a compensation package valued at $11.5 million in the company's 2010 fiscal year
Sara Lee, which makes products such as Jimmy Dean sausage, Hillshire Farm meats and its namesake desserts, paid Smits a salary of $736,347 for the 2011 fiscal year, which ended July 2. He received stock awards valued at $3 million and option awards valued at $1 million, according to a regulatory document filed last Thursday with the Securities and Exchange Commission.
Sara Lee paid Smits a performance-based cash bonus of $659,218. And he received perks worth $273,305 during the year, which includes life insurance premiums, a car allowance, contributions to retirement savings, a housing allowance and relocation payments made for his move from The Netherlands.
Smits' pay package had been valued at roughly $3.1 million in the 2010 fiscal year, which only included a few months as interim CEO.
Sara Lee, based in Downers Grove, Ill., announced plans in January to split its business in two. One unit will keep the company name and focus on its North American retail business. The other, currently dubbed CoffeeCo, will focus on its international beverage business. The deal is expected to be complete in early 2012.
Sara Lee earned $1.29 billion, or $2.06 per share in its 2011 fiscal year. That compares with earnings of $506 million, or 73 cents per share, in 2010. After adjusting for several special items, the company earned $1.05 for the year versus $1.08 per share in the prior.
Annual revenue rose to $8.68 billion from $8.34 billion.
The company, like most food and beverage makers, has raised its prices to offset higher costs for commodities from coffee to fuel but has seen this cut into its sales volume.
Sara Lee will hold its annual meeting on Oct. 27.
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.