PAY CUT FOR TOP EXECUTIVES AT XEROX
PAY CUT FOR TOP EXECUTIVES AT XEROX
2009-04-10 at 12:19:22 pm #21908
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.