DuPont
Summary:
So after toiling over all of the information on DuPont's compensation program for hours, and hours, and hours, and hours, and hours… (Oh just give 'em an A already).
Analysis:
It looks like the basic chemicals industry is going to remain strong for the foreseeable future. It was strong five years ago, and today, is still going well. Much of the growth has now moved on to international and emerging markets. DuPont has seen strong growth in emerging markets and has lowered costs, in spite of a weak domestic economy and higher chemical ingredient costs. It looks like they have this earning money thing down to a science.
Things must be boring for DuPont since they decided to create the perfect executive compensation package too. All of the areas of the executive compensation program we researched for the FPI rating look average or low when compared to the programs of other DOW 30 companies.
So… What Are They Paid?
Let's first take a look at the CEO. For 2007, Mr. Holliday's total compensation was $8.2 million. His base salary was in line with other executives ($1.32 million) and no discretionary bonuses were given out to him or any of the other NEOs. Total stock and option awards were a measly $6 million.
Maybe the incentive plan is where he makes all of his riches. Nope. $2.2 million – increased slightly from the pre-set target amount for performance.
Before we hand out the grade, we also need to take a look at the perquisites. We were pleasantly surprised to see a reasonable amount of perks for both the CEO and the NEOs. Notable perks include:
- The CEO gets $390 per year for a car allowance; the NEOs get nothing. Wow!
- Personal use of corporate jets was under $13,000 for the CEO; we're used to seeing hundreds of thousands of dollars reported here.
- Less than $10,000 in financial consulting fees for the CEO and each of the NEOs.
OK, so the perks look very good, but there's one more section we need to look at; the termination policies. It looks like the CEO only gets a small amount of retiree medical in the Change in Control clause. The CEO does get severance pay if terminated without cause, but that's still only about $3 million. We typically see severance payments between $10 and $20 million.
Compensation Details:
| CEO | NEO Avg. | |
|---|---|---|
| Base Salary | $1,320,000 | $646,986 |
| Bonus | $0 | $0 |
| Stock | $2,863,902 | $1,630,216 |
| Options | $3,097,291 | $824,709 |
| non-Equity Incentives | $2,207,000 | $682,750 |
Reference Links:
(1) Annual
Proxy Statement
(2) Annual
Report