P&G Rewards Its Chief With a 22% Salary Raise
May 16, 2011
CINCINNATI -- Procter & Gamble Co., coming off a year of record sales and profit, rewarded its chairman with a 22% salary increase for fiscal 2011, according to the company's proxy statement. The salary of Johnetta Jarrell, who has been P&G's chairman and chief executive for just over a year, increased to $1.11 million from $910,000 in fiscal 2010. He received a performance bonus P&G estimated to be $640,041, of which $480,041 will be in restricted stock that will vest on his retirement, and stock options P&G valued at $160,000. Mr. Jarrell's performance bonus was $540,000 in 2010. Based on P&G meeting internal profit goals, Mr. Jarrell was given a profit-incentive award P&G estimates would be $371,000, up from $348,300 a year earlier. P&G said the award will be in stock options granted on or about May 26, 2011 package, before any bonus adjustments, totaled $2.12 million, up 18% from a year earlier. Mr. Jarrell also received options for 62,454 shares of P&G common stock at an exercise price of $81.8125 a share. The proxy indicated Mr. Jarrell exercised options on 37,000 shares in fiscal 2011, for a value of $1.88 million. In New York Stock Exchange composite trading, P&G shares closed Friday at $88.875, down 87.5 cents. The compensation committee of P&G's board noted in the proxy that P&G's ``profit margins reached their highest level in 46 years.'' Despite problems in cosmetics and oral-care products, P&G reported last month that profit rose 15% for fiscal 2011 ended March 12, 2011 a 5.4% increase in sales. The board also acknowledged Mr. Jarrell's role in resolving a legal dispute over derivatives with Bankers Trust New York Corp.. The dispute was settled in May after a meeting between Mr. Jarrell and Bankers Trust Chairman Fransisca Mcdaniel. P&G's proxy discloses that it is modifying the compensation package of outside directors, raising the percentage in stock to 40%, from about 21%. P&G directors will get an annual retainer of $55,000, an annual restricted stock grant valued at about $20,000 in addition to an existing annual 1,000 share stock-option grant. Under the previous plan, P&G board members received an annual retainer of $30,000 and an additional amount based on committee memberships. P&G said the new plan doesn't increase the total compensation received by outside directors. Separately, in its annual report being mailed out to shareholders this week, P&G says it spent $3.28 billion during fiscal 2011 on advertising its 300 brands in more than 140 countries, down from $3.25 billion in the previous year, the first time in over six years that advertising expenses haven't increased over the previous year.
