NEW YORK (AP) - Abbott Laboratories Inc. Chairman and Chief Executive Miles White saw a 13.9 percent reduction in his total compensation in 2008 to $25.3 million, mainly because he received less in stock options, in a year in which profit and sales rose.
White’s total compensation was down from $29.4 million in 2007. His salary rose 4 percent to just under $1.8 million, while the performance bonus rose 3.7 percent to $4.2 million. Perks, including retirement-related payments and jet travel, fell nearly 19 percent to about $851,000. Also, above-market earnings on deferred compensation fell to $230,526 from $473,761.
The bulk of White’s compensation, though, was in the form of stock options. They were worth $18.3 million on the day they were granted, compared with the prior year’s figure of about $22.1 million. The key difference in 2008, though, is that those options are now “underwater,” with strike prices between $55.55 and $58.90. That compares to a current share price of $47.95.
In 2008, shares of the diversified health care products company fell 5 percent to close at $53.37. They continued to slide along with the broader market as the economy slipped deeper into a recession.
The Associated Press’ compensation 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.
North Chicago, Ill.-based Abbott, by all accounts, had a successful 2008, with profit rising 35 percent to $4.88 billion on a 14 percent boost in revenue to $29.53 billion. The gains came on strong sales of the blockbuster drug Humira and medical devices including stents. Humira is approved to treat rheumatoid arthritis, psoriasis, Crohn’s disease and other immune-system disorders.
White, 54, joined Abbott in 1984 and has been CEO and chairman since 1999.
(This version CORRECTS total compensation to include above-market returns on deferred compensation.)