Poor Xerox Ceo Ursula Burns, Only Made $12.9 million in 2011

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Poor Xerox Ceo Ursula Burns, Only Made $12.9 million in 2011

Compensation drops 2% in 2011 for Xerox’s Burns
Xerox Corp. chairman and CEO Ursula Burns saw a more than 2 percent drop in compensation last year to $12.9 million from $13.2 million in 2010, a proxy filed by the company with U.S Securities and Exchange Commission Tuesday shows.

In 2011, Burns pulled in a $1.1 million salary and was awarded a $990,000 cash bonus, down from $1.7 million in 2010.  Her non-cash compensation included $7.5 million in stock awards and a $3.2 million bump up in the value of her accrued pension benefits.

Rounding out Burns’ pay package was $123,537 in other compensation, a category the company lists as including benefits such as personal use of company aircraft, financial planning services, executive physicals and home security. Part of Burns’ 2011 other compensation benefits included a relocation-expense reimbursement, the proxy states.

The company’s new chief financial officer, Luca Maestri, received a 2011 pay package totaling $3.3 million. Maestri received $568,750 in salary, a $341,250 cash bonus, $34,707 in other compensation and stock awards valued at $1.8 million. Maestri, who was hired by Xerox last year, also collected a $600,000 signing bonus.

Former Xerox CFO Lawrence Zimmerman, who stepped down in February 2011, received $1.3 million in total compensation last year. A $962,175 rise in pension-benefit value accounts for most of the total. The calculation of the pension-benefit increase includes amounts Zimmerman actually collected in 2011, the proxy states. 

Other top earners listed are:

    Executive Vice President Armando Zagalo de Lima with total compensation of $5.4 million;
    Executive Vice President James Firestone with total compensation of $4.7 million; and
    Executive Vice President Lynn Blodgett with $3.8 million in total compensation.

http://www.democratandchronicle.com/article/20120410/BUSINESS/304100025/Xerox-Ursula-Burns-compensation?odyssey=nav|head
Xerox reduces Burns’ compensation to $2.2M from $3.1M
Last year was not a great one for Xerox Corp. shareholders, with the company’s stock price finishing 2011 at $7.96, down 31 percent from a year earlier.

And it was a mixed year for the company’s overall financial performance, with revenues flat if you take away international currency issues and the fact that Xerox made a huge acquisition in 2010, but adjusted profits up 15 percent.

It also turned out to be a less-golden year than it could have been for the top executives’ pocketbooks.

Ursula M. Burns, CEO of the printing and business process outsourcing company, received a 4.7 percent salary increase to $1.05 million. But performance incentives, which typically make up the majority of her cash-based compensation, took a steep dive last year, as did perquisites.

As a result, Burns’ total compensation, including salary, was $2.2 million in 2011, down from $3.1 million in 2010, according to a proxy statement filed Tuesday with the U.S. Securities and Exchange Commission.

Those figures don’t include any stock or stock options. In 2011, Burns received shares with an estimated potential value of $7.5 million, the same as she received in 2010.

The proxy statement comes out in advance of Xerox’s annual shareholders meeting, which is to be held May 24 in Norwalk, Conn., where the company has its headquarters. Shareholders will elect board members and vote on an advisory basis on the company’s 2011 compensation packages for top executives.

Among the executives whose compensation was spelled out in the proxy, Burns was by far the most generously rewarded. Executive Vice President James A. Firestone saw his salary remain flat at $714,000, while his incentive plan compensation dropped 44 percent to $428,400.

Citing concerns about a weak global economy, Xerox said its board decided there would be no salary bumps for executives in 2011. Burns’ 2011 salary increase came from a pay raise she received partway through 2010. According to the proxy, the company also fell short on revenue growth and cash generation, meaning fewer short-term incentives for executives. And that cash flow also meant no increase for Burns in her long-term incentives.

Year-over-year comparsions for some other executives, such as former Chief Financial Officer Lawrence Zimmerman, who retired partway through 2011, and new CFO Luca Maestri, are not possible.

The people who oversee Burns, meanwhile, did somewhat better in 2011. Most of the board members were paid, on average, $77,500 in fees and received stock awards valued at $130,000 last year. In 2010, most board members made $66,800 in fees and got stock awards valued at $110,000.

Burns did not receive any compensation as a board member.

According to the proxy, Burns owns 319,000 shares outright and 226,000 shares in an annuity trust, and holds options or rights to 1.6 million shares.

http://www.democratandchronicle.com/article/20120408/BUSINESS/304080023
Sea of change at Xerox
Xerox Corp. built its empire by putting little black marks on white sheets of paper.

Making mountains of copiers, printers and printing presses helped build Rochester’s economy, from the sprawling manufacturing and research-and-development campus in Webster to the corporate and sales jobs in downtown’s 30-story Xerox Square.

But driven by market trends and a moribund economy, Xerox is going through a profound shift in what it considers its bread and butter. Under the leadership of CEO Ursula Burns, the area’s largest manufacturer and publicly traded company is becoming more a provider of business services than a maker of goods.

Xerox is heading down a road that will see it focus more on providing human resources outsourcing, information technology consulting and customer care services than on building, selling and servicing office equipment and big digital printing presses.

For Xerox, it represents a smart move, grabbing onto a rapidly growing industry.

But for the Rochester region and the 6,300 Xerox workers here, the shift represents numerous unknowns about the future of its traditional technology business and about the type and number of jobs to be done here.

While Rochester will remain the headquarters and primary hub of Xerox’s technology business, Burns said, “The thing that made Xerox ‘Xerox’ in Rochester, which was the maker of technology, will not be the exclamation point after that.”

What that means for area workers “is the million-dollar question,” said Gary Bonadonna Sr., manager of the Rochester Regional Joint Board, the labor union representing 1,100 hourly Xerox workers. “Who knows what’s going to happen with technology? Xerox is still going to make products — hopefully here in Webster.”

Xerox’s services-centric approach follows a similar path IBM Corp. took in the 1990s in one of the most dramatic turnarounds in modern business history. The computer company — whose hardware was ubiquitous in offices everywhere before market trends shifted — remade itself into a provider of business services.

Xerox has been in the services business for years, particularly in document management. But Burns and the company dove into the deep end of that pool in early 2010 with the $6.4 billion purchase of Dallas-based business process outsourcing giant Affiliated Computer Services.

With ACS under its wing, Xerox went from a $15.2 billion company with 53,000 workers that was technology-centric to a $22.6 billion company with 139,000 workers. And 48 cents of every dollar Xerox took in last year came from the services side of the company versus 45 cents from technology.

Sales of equipment represented only 17 percent of Xerox’s sales in 2011.

“One of the reasons we like (business process outsourcing) is the market offers lots of opportunities,” Chief Financial Officer Luca Maestri told a Goldman Sachs technology conference earlier this year. “It’s put the company in a position where if you’re facing an (economic) downturn, you have a much more stable base.”
In Rochester

Just as services are becoming the dominant arm of Xerox, they are increasingly becoming part of Xerox’s Rochester-area footprint, Burns said.

Big digital printing presses such as the iGen and CiPress will continue to be manufactured in Webster “because we have the infrastructure here,” as will toner and parts, she said. And the Rochester area will continue to be home to much of the company’s corporate infrastructure, though the headquarters are in Norwalk, Conn.

“But if things go well, this will be a place where we have an option for some of our customer care initiatives, which you guys will call ‘call centers’ but are a lot bigger than call centers,” Burns said in a Democrat and Chronicle interview on March 30 at Xerox Square. “It depends on how the business grows.”

It also depends on how well a customer care center being established now at the Webster campus works out. “If (that center’s workforce) is good, then this will be as good a place as any to have that business grow,” Burns said.

Xerox locally is becoming a microcosm of the company’s changing face.

The company over the past six years has spent almost $100 million on building and then expanding a toner manufacturing plant in Webster that employs 80 people.

But the company also is in the process of setting up the customer care center Burns mentioned. It is to be up and running by fall and will employ about 500 within two years, with most of the jobs being care center agents making on average $25,000 a year before taxes.

While the number of technology employees in Webster has slid substantially in recent years, the last three years have seen the decline in hourly workers level off, Bonadonna said. “Hopefully it’s not going to go any lower.”
Cost cutting

As Xerox makes more money from taking care of back-office operations for companies, government agencies and other entities, it also is taking advantage of cost-cutting opportunities. In June, it transferred 600 engineering jobs, including 250 locally, to HCL Technologies Ltd., an information technology giant based in India.

Burns said she doesn’t foresee Xerox’s employment growing significantly, primarily because of an ongoing push for greater efficiency.

When asked about the odds of significantly lower employment, she said, “I actually don’t know. I can’t foresee it right now, but I refuse to say it won’t be so. The way the world is changing, it’s hard to predict.”

One thing Xerox is predicting is a so-so 2012. In January, it revised downward its cash flow expectations for the year. The company expects modest growth, with “solid growth” in services somewhat offset by economic pressures on the technology business.

Wall Street has concerns about Xerox, at least in the near future.

“While both ACS and Xerox are well-run businesses, each faces its own set of secular challenges,” JPMorgan Chase & Co. analyst Mark Moskowitz wrote in a note to investors earlier this year, pointing to imaging and printing being a low priority in companies’ information technology budgets and to slipping renewal rates for services customers.

Gabelli & Co. analyst Hendi Susanto, in a similar note, said the stock likely is languishing because of “a perception that Xerox lacks exciting growth opportunities.”

Xerox shares this year have averaged $8.20, down from more than $9 in 2010 and 2011 and $14 just before the 2007-2009 recession.
Chasing growth

Despite the lagging stock price, shareholders have the best understanding of the shift Xerox is making, Burns said. “They get it. And now we just have to operate.”

Xerox’s revenue from technology was down more than 4 percent in 2011, with the company pointing to such issues as a dreary European economy and the Japanese natural disasters, as well as the broader issue of declining demand for black-and-white commercial printing equipment.

“What we’re chasing is pockets of growth,” Burns said. “We chase after the fact (that) high-end digital printing on the color side is growing. We’re chasing after the fact (that) office-managed print services is growing. At the same time, we’re disinvesting energy, focus, advertising dollars, transportation away from the areas that are not growing.

“We’re going to let go of the things we need to let go of. … My next research-and-development dollar is going to be after the next breakthrough in color. After that we’ll put our research and development into the next breakthrough … in business processes.”

The expectation is relatively slow growth but sustained profitability for the technology business, and a rapidly growing services business driving up the stock price.

Hourly workers are hoping the services tide also lifts their boat.

“Being in the service business actually helps the manufacturing business,” Bonadonna said. “If they get in as a service provider, they bring with them the equipment. The services business can only help sell more product. That’s the key for us to grow.”

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April 12, 2012 at 9:15 AM