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 user 2009-04-10 at 12:20:03 pm Views: 40
  • #21909
    Pay cut for top execs at Xerox
    bosses at Xerox Corp. saw their compensation drop in 2008 as the
    company was hammered by the recession. Their compensation packages this
    year are likely to take a similar hit.Chief Executive Anne Mulcahy
    received pay, stock and other compensation valued at $12 million last
    year, compared with $14.6 million in 2007.Ursula Burns, the company’s
    president and the highest-ranked Xerox executive based in Rochester,
    received compensation valued at $3.2 million, compared with $5 million
    in 2007.

    The compensation for Mulcahy and Burns, as is the case
    with most top executives at major U.S. corporations, is heavily tied to
    the company’s performance. And in 2008, the company’s revenue of $17.6
    billion was up a scant 2 percent over 2007, and even that small gain
    was attributable to Xerox’s purchase of Florida-based office equipment
    dealer Global Imaging Systems.Profit, meanwhile, was $230 million last
    year, a decrease of more than $900 million from 2007, as the company
    spent nearly $800 million on restructuring and on lawsuit
    settlements.Xerox stock finished 2007 at more than $16 a share, and
    wrapped up 2008 at slightly under $8 a share.

    The company fell
    short of its revenue growth target in 2008, and somewhat short on goals
    of earnings per share and cash flow, according to the company’s 2009
    proxy statement, which it issued Monday. So short-term incentive awards
    were down. In addition, there were no payouts in the executive
    long-term incentive performance program because of the recession’s
    impact on business in the fourth quarter.As a result, Mulcahy’s
    incentive compensation that doesn’t come in the form of stock was
    roughly $1 million in 2008, less than half of what it was in 2007.
    Burns received $600,000 less in nonequity incentive compensation for
    2008 compared with 2007.Given the global economic downturn, payouts in
    2009 under the long-term incentive program also are unlikely, the
    company indicated in its proxy.

    The company has changed the way
    it will calculate the annual performance incentive plan for executives
    in 2009, no longer focusing on revenue growth. Still, the company said
    in the proxy statement that it expects the 2009 performance targets “to
    be difficult to achieve.”The proxy also contains other information for
    shareholders, who will meet May 21 at Xerox headquarters in Norwalk,
    Conn., to vote on the election of 10 board members and on the hiring of
    PricewaterhouseCoopers LLP as outside accounting firm.Other top
    executives’ compensation packages in 2008, including pay, perquisites
    and stock, were: Chief Financial Officer Lawrence Zimmerman, $2.9
    million; Senior Vice President Jean-Noel Machon, $3.1 million; and
    Executive Vice President James A. Firestone, $3.2 million.

    base salaries of those five top executives all are frozen in
    2009.Mulcahy’s base salary was $1.3 million in 2008, unchanged from
    2007. Also included in Mulcahy’s compensation was $158,000 for use of
    the company aircraft, which according to Xerox she is required to take
    “for reasons of security and personal safety.”

    Burns got a raise
    in her base salary from $798,000 to $888,000 to reflect additional
    responsibilities as president.Mulcahy’s and Burns’ compensation
    packages were calculated using a formula employed by The Associated
    Press. Xerox in its own estimates calculated that Mulcahy’s 2008
    compensation was $11 million and Burns’ was $6 million.Xerox is the
    Rochester area’s fourth-largest employer with about 7,000 workers.

    Kodak Co. released its proxy last week. The business downturn at the
    area’s third-largest employer showed a similar pattern, with CEO
    Antonio Perez’s 2008 compensation dropping along with Kodak’s financial