Reynolds American Inc. CEO Susan M. Ivey made $16.2 million last year, about 84 percent more than the previous year as the nation’s second-biggest tobacco company struggled with declines in cigarette demand, according to a calculation by The Associated Press based on government filings.
Last year, the maker of Camel and Pall Mall cigarettes, and Kodiak and Grizzly smokeless tobacco saw its profit fall about 28 percent as revenue fell by 4.8 percent. The cigarette maker raised prices to offset sales volume declines it blamed on the economy and a 62-cents-per-pack federal tax increase that began in April.
For the year, Reynolds American said cigarette volumes fell 8.7 percent, while the company estimates an industry overall decline of 8.6 percent.
More than half of Ivey’s pay package was accounted for in $8.5 million for a performance-based incentive bonus for 2009 and cash settlement of a 2007 long-term incentive plan. Her salary grew about 1 percent to $1.3 million.
The value of her stock options and stock awards nearly tripled to $6.2 million.
Ivey, who has headed the company since January 2004, was also given other compensation worth $198,217, which included a $79,000 payment given in place of the company’s old executive perks program and personal flights on company-owned planes valued at about $11,500.
In 2008, Ivey’s compensation was valued at $8.8 million.
Reynolds American also announced that it will hold its annual shareholders meeting on May 7 at its Winston-Salem, N.C., headquarters.
The Associated Press formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year.
It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don’t include changes in the present value of pension benefits, making the AP total different in most cases than the total reported by companies to the Securities and Exchange Commission.