PAY CUT FOR TOP EXECUTIVES AT XEROX

[Anonymous]

http://www.democratandchronicle.com/article/20090407/BUSINESS/904070309/1001
Pay cut for top execs at Xerox
Top
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.

The
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.

Eastman
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
fortunes.

[Author]

April 10, 2009 at 12:20 PM