Walgreen CEO's pay up 36 percent to $10.9 million

AP News
Posted: Nov 18, 2011 7:07 PM
Walgreen CEO's pay up 36 percent to $10.9 million

Drugstore operator Walgreen reported Friday that it paid its president and CEO 36 percent more in its latest fiscal year than in 2010 as the company's profit grew 30 percent.

An Associated Press analysis of a regulatory filing shows Gregory Wasson received compensation worth $10.9 million in fiscal 2011, up from $8 million the previous year.

Walgreen Co. is the largest drugstore chain in the U.S., with more than 7,700 stores. Wasson, 53, has been Walgreen's president and CEO since February 2009.

All portions of Wasson's compensation grew. His salary rose 12 percent to $1.2 million. His stock awards climbed 67 percent to $5.6 million, the value of his options increased 30 percent to $2.2 million and his non-equity performance bonus went from $1.7 million to $2.7 million. His perks in 2011 were worth $339,977, up from $194,577.

The Deerfield, Ill., company said Wasson's perks, or "other compensation," included $164,000 from a profit sharing restoration plan and $119,000 for dividends and equivalents on unvested restricted stock units, along with term life insurance valued at $19,000, $14,000 in profit-sharing, and $3,300 in dividends on unvested restricted stock. The remaining $22,000 covered long-term disability benefits, an annual physical, reimbursement of health club fees, personal accident insurance and reimbursement of some ground transportation costs.

In the fiscal year, Walgreen's profit climbed to $2.71 billion, or $2.94 per share. Its sales rose 7 percent to $72.18 billion.

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 2011 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.