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Lexmark executive bonuses fall
MOVE REFLECTS DIP IN STOCK PRICES
After a year in which the company’s stock price fell by half, Lexmark International’s performance came to be reflected in the pay of its top executives.The company’s proxy statement, released Tuesday morning, revealed that the board cut an annual incentive bonus last year to CEO Paul Curlander because of the company’s struggling inkjet printer division. In 2006, Curlander received more than $1 million through that bonus.Overall, Curlander’s pay dropped more than 18 percent compared with 2006, while all other top executives, except Chief Financial Officer John Gamble Jr., saw total compensation drop, too. No base salaries fell year-over-year, but payouts of some incentive plans and various stock-related awards did.”In a company, many times investors get frustrated because it seems management gets rewarded regardless of financial performance or a firm’s share price,” said Tom Carpenter, vice president and senior equity analyst at Hilliard Lyons in Louisville. “In this case, the board chose not to reward management, and this accurately reflects Lexmark’s struggles the past two years.”Since late 2005, the company has launched two strategy shifts aimed at improving inkjet, which has suffered as owners of the printers didn’t buy enough ink to meet profit expectations.
The company has eliminated and shuffled employees, shuttered plants and withdrawn from some of its inkjet sales, hoping to instead target people who print more.The previous head of the division, Najib Bahous, now works for the company in Europe, while Paul Rooke, who headed the laser printer division, was tasked with reversing inkjet’s decline.Rooke received the highest annual incentive bonus of all the top executives at more than $180,000, but that was down from his $381,833 bonus in 2006.Under Lexmark’s policy, board members defer questions to the company, which declined on Tuesday to comment on the lack of an incentive bonus for Curlander or the executive pay in general.”Executive compensation can fluctuate greatly from year to year,” said Carpenter, whose firm owned at least 1 percent of Lexmark stock on behalf of clients at the end of February. “Considering (Curlander) received $1 million last year, this isn’t the end of the world. If he were to get zero again this year, then that is something to talk about.”The proxy also noted the company’s annual shareholders meeting will be at 8 a.m. April 24 at the Embassy Suites on Newtown Pike.
2007 Lexmark executive compensation
CEO Paul Curlander
2007 base salary: $1,003,846.
Annual incentive compensation: $0, down from $1,048,320 in 2006.
*Total: $8.18 million, down 18.6 percent from $10.06 million in 2006.Inkjet division leader Paul Rooke
2007 base salary: $565,269.
Annual incentive compensation: $186,321, down from $381,833.
*Total: $2.67 million, down 5 percent from $2.81 million.Laser division leader Marty Canning
2007 base salary: $404,135.
Annual incentive compensation: $97,315, down from $200,027.
*Total: $1.211 million, down 0.2 percent from $1.213 million.Chief Financial Officer John Gamble Jr.
2007 base salary: $489,115.
Annual incentive compensation: $50,337, down from $343,575.
*Total: $1.64 million, up 18 percent from $1.39 million.General Counsel Vincent Cole
2007 base salary: $416,423.
Annual incentive compensation: $42,252, down from $277,914.
*Total: $1.53 million, down 12.3 percent from $1.75 million.
* Total compensation includes base salary, other incentive packages and stock-related awards
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