Reynolds American Inc., the nation's second-biggest tobacco company, awarded its incoming CEO Daniel M. Delen a compensation package valued at $8.5 million in fiscal 2011, up 38 percent from fiscal 2010, when he served as president and CEO of subsidiary R.J. Reynolds Tobacco Co., according to an Associated Press analysis of a regulatory filing.
The pay package came in a year when the maker of Camel and Pall Mall cigarettes, and Kodiak and Grizzly smokeless tobacco saw its net income grow more than 27 percent and its revenue excluding excise taxes was flat at $8.5 billion. The company, based in Winston-Salem, N.C., raised prices but sold 6 percent fewer cigarettes.
The compensation deal was disclosed in the company's preliminary annual proxy filing with the Securities and Exchange Commission late Thursday.
Delen's base salary grew 15 percent to $1 million. He also received a cash performance bonus totaling about $1.2 million. Delen, who became CEO last March, also received stock and options valued at about $6.2 million on the date granted.
The 46-year-old also was given other compensation worth $176,567, a majority of which was for contributions to the company's pension plan.
Susan M. Ivey, who retired as CEO in February 2011, received a pay package valued at $753,660 in fiscal 2011, a 96 percent decrease from $16.8 million in 2010.
Reynolds American also said it will hold its annual shareholders meeting May 3at its headquarters, where it will elect six directors to its board and vote on one shareholder proposal to create an ethics committee to review the company's marketing activities.
The Associated Press formula for calculating executive compensation is designed to isolate the value that the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, making the AP total different in some cases than the total reported by companies to the SEC.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.