- The Washington Times - Thursday, March 12, 2009

PROVIDENCE, R.I. (AP) - Textron Inc., which has been reeling from the financial crisis and sharp declines in orders for business jets, cut the compensation for its chief executive last year.

The Providence, R.I., manufacturer of Cessna jets, Bell helicopters and E-Z-GO golf carts gave compensation of $9.8 million to CEO Lewis B. Campbell, 62, down 16 percent from $11.8 million in 2007, according to a filing with the U.S. Securities and Exchange Commission Thursday.

Textron paid Campbell $1.1 million in salary, unchanged from 2007. It paid no bonus, which is also unchanged from the previous year.

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And it cut the performance-based bonus to $617,980 from $2.2 million in 2007. Other compensation totaled $650,842, most of which was for Lewis’ personal use of the company’s plane.

Campbell received 153,557 options to buy shares at an exercise price of $54.17 each. The fair-market value for those options on the day they were granted in February 2008 was about $2.15 million, though now they are worth little since the share price currently trades around $5 a share. The options vest in 10 years. He also received grants for other stock awards valued by the company at $5.3 million.

The Associated Press calculations of total pay include executives’ salary, bonus, incentives, 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.

Textron said that for 2008, the “major yardsticks” that it used to measure performance were earnings per share and return on invested capital, “with small components related to leadership behaviors and work force diversity.”

These measures are “effective indicators of shareholder returns and help ensure effective use of the capital which shareholders entrust to the company,” Textron said.

For 2008, Textron reported net income of $486 million, or $1.95 per share, nearly half the $917 million, or $3.60 per share, earned in 2007. Excluding special charges, it earned $3.17 per share for 2008. Analysts had anticipated a profit of $3.11 per share.

The company said it will eliminate perks such as company vehicles, club memberships, financial planning and income tax preparation. It will require executives to reimburse Textron for some personal use of company aircraft and it froze salaries for senior executives for the third consecutive year.

The company said in February it has drawn $3 billion in credit to pay off debt and pump liquidity as it exits nearly all of its commercial financial business.

Shares of Textron, which ended fiscal 2008 down 81 percent at $13.87, closed Wednesday at $4.77 each.

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