Albert Lea Tribune, Minn.
AUSTIN — Hormel Foods Corp. CEO, president and chairman Jeff Ettinger received a compensation package worth nearly $9 million for the 2011 fiscal year, equal to his 2010 pay package.
An analysis by The Associated Press shows that Ettinger received a base salary of $991,490 for the year that ended Oct. 30. That compares with $989,430 given in 2010.
Hormel gave Ettinger option awards valued at $3.9 million, up 18 percent from $3.3 million the prior year. And he received other compensation, including perks such as a company car, director fees and physical exams, worth $64,905; that’s up 13 percent from last year.
He and all other members of the executive team also received a bonus of $250, which they did not receive last year.
The only component of his pay package that shrank was incentive pay, which fell 14 percent to nearly $4 million from nearly $4.6 million last year, according to a document filed with regulators Wednesday.
Hormel has grown considerably under Ettinger, with annual net earnings increasing three years running.
Hormel’s full-year earnings for the 2011 fiscal year rose 20 percent to $474.2 million, or $1.74 per share. After adjusting for costs tied to the closure of a plant and other one-time items, the company earned $1.51 per share for the year versus $1.46 a year earlier. Annual revenue increased 9 percent to $7.9 billion.
The company did see its business slow in the second half of the year, as higher costs began to eat into its profitability. Like many companies, Hormel has been coping with higher costs for everything from ingredients to packaging, and it has raised prices to offset that. Those higher prices have hampered its sales as some shoppers shied away from spending more.
Ettinger, 53, has been CEO since 2006.
The AP formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The formula does not count changes in the present value of pension benefits. That makes the 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 for 2011 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. However, 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.
Hormel plans to hold its annual meeting Jan. 31.