Avon CEO 2011 compensation falls 35 pct to $6.4M

AP News
Posted: Apr 04, 2012 1:56 PM
Avon CEO 2011 compensation falls 35 pct to $6.4M

Andrea Jung, CEO of Avon Products Inc., received a compensation package valued at $6.4 million in 2011, down 35 percent from a year ago, according to a regulatory filing analysis by the Associated Press.

The filing comes a day after Coty Inc. made a $10 billion offer for the company, which Avon rejected. The New York company is struggling to turn around weak sales, fix operational problems overseas and wrap up a bribery probe. It is currently looking for a new CEO, though Jung intends to remain chairman and is assisting in the search for her replacement.

Jung, 53, who is assisting in a search for her successor as CEO, received a base salary of $1.4 million, the same as the year before. She received a stock award worth $4.8 million. She did not receive a bonus or a performance-based bonus, according to a filing with the Securities and Exchange Commission.

She also received other compensation worth $207,227 for financial planning and tax preparation, an auto lease, personal auto insurance, excess liability insurance, home security, an executive health exam, a $95,577 car service allowance and 401(k) matches.

The decline between 2010 and 2011 is mainly due to her receipt in 2010 of a long-term performance bonus that Avon pays top executives every three years.

Jung joined the company In 1994 as president, product marketing. She rose through the ranks to become CEO in 1999 and added the chairman title in 2001.

Avon called 2011 "challenging" in the filing. Its Revenue rose 4 percent, but it had 1 percent fewer independent salespeople and units sold fell 2 percent.

"We saw slower than expected growth in several markets reflecting business challenges and weaker macro-economic conditions," the filing states.

The company is also suffering from a variety of long-running woes. Its profit has shrunk over the past three years. It has frequently missed analysts' earnings expectations and posted weak sales in some of its largest markets, including Brazil and Russia. Avon also faces a bribery probe that started in China and widened to other countries. The Securities and Exchange Commission is investigating Avon's contact with financial analysts in 2010 and 2011 related to the investigation.

Investors and analysts have blamed CEO Jung for being slow to react to declining results and wrap up the bribery investigation. In December, Avon said it will separate the CEO and chairman roles and hire a new CEO.

The Associated Press executive compensation formula is designed to isolate the value 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 most cases from the total reported by companies to the SEC.