NEW YORK -- H.J. Heinz Co., the world's biggest ketchup maker, says it gave its CEO a pay package worth $14.4 million in its fiscal 2012, down 8 percent from last year, according to an Associated Press analysis of a regulatory filing.
The drop in pay for William Johnson, who has been chief executive since 2000, was largely the result of lower performance-based bonus pay. The company's net income for the fiscal year ending April 29 declined 7 percent from the previous year.
The 63-year old Johnson, who also serves as chairman and president, was given a salary $1.3 million, up 4 percent from the previous year. His stock and options came to $4.1 million, compared with $4 million the previous year.
His bonus pay came to $7.7 million, down 13 percent from $8.9 million. The incentive pay is based on a company formula that uses metrics including the company's sales growth and profitability.
All other compensation, which included car allowances and contributions to retirement plans, amounted to $1.3 million, down from $1.4 million.
Like other food companies, Heinz in the past year has raised prices on its products – like Ore-Ida frozen potatoes and Classico pasta sauces – to offset rising commodity costs. The Pittsburgh-based company has also said it would cut jobs and close plants to lower costs and improve productivity.
As growth struggles at home, the company is also focusing on countries such as Brazil, China Russia and Indonesia, which are growing faster than the U.S. and Western Europe.
Looking ahead Heinz foresees fiscal 2013 earnings per share rising 5 to 8 percent, excluding special items.
The AP formula calculates an executive's total compensation by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded.
The formula doesn't count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. The number is just an estimate and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted.
Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.