- The Washington Times - Wednesday, April 1, 2009

MILWAUKEE (AP) - This is a test of the Associated Press and not intended for Publication or Broadcasting.

Larry D. Young, the chief executive officer and president of Dr Pepper Snapple Group Inc., received compensation the company valued at almost $8.9 million in 2008, according to an Associated Press analysis of a regulatory filing Tuesday.

Young, 54, has been president and chief executive of the maker of drinks such as A&W;, Canada Dry and Crush since October 2007. The Plano, Texas-based company was spun off from British candy maker Cadbury last May.

He received a base salary of about $867,308 in 2008, according to the company’s report filed with the Securities and Exchange Commission. The bulk of his compensation came in stock options and restricted stock, much of which has lost value as the company’s stock has declined in recent months.

According to the filings, Young received a performance-based bonus of $1.6 million last year, of which $1.1 million was a “successful spin-off bonus” the company awarded executives. The filings said the spin-off bonuses, which will not be repeated in future years, were paid for by the parent company at the time of the spinoff from Cadbury.

Young’s other compensation, which includes perquisites, was $206,130. The figure includes $33,923 for an automobile allowance and $109,207 for club membership dues and expenses.

Young’s stock options and restricted stock were worth about $6.1 million on the day they were granted. The options, which accounted for more than a third of the total award, had an exercise price of $25.36 and have less value now because the stock price has tumbled. Shares traded midday Wednesday at $17.15.

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, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

Cadbury spun off its beverage division last year to focus on its core candy business.

Dr Pepper Snapple Group, which also makes 7UP, Mott’s and RC Cola, finished 2008 losing $312 million, or $1.23 per share. That compares to a profit of $497 million, or $1.96 per share, in 2007. Revenue rose slightly to $5.71 billion from $5.7 billion.

Excluding one-time charges, the company earned $1.85 per share in 2008.

The company, a smaller rival to top-beverage maker Coca-Cola Inc. and number two player PepsiCo Inc., is facing a shrinking marketplace. Industry publications reported this week that soft drink sales volume fell 3 percent in 2008 as consumers cut back on their consumption. But dollar sales rose 1 percent for the industry to $72.7 billion, Beverage Digest reported, on price increases and as consumers bought more premium-priced energy drinks.

Last week in announcing their company’s latest quarterly results, Dr Pepper Snapple executives said they are touting new soft drinks such as Dr Pepper Cherry and A&W; Root Beer made with real aged vanilla to help drive growth. Overall volume in the company’s fourth quarter fell 1 percent, while carbonated soft drinks declined slightly less.


(CO:PEPSICO INC.; TS:PEP; IG:31F4C0688ADB10048F839A38BE1DD83E;)




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