- The Washington Times - Tuesday, March 17, 2009

SAN DIEGO (AP) - Donald Felsinger, chairman and chief executive of Sempra Energy, received compensation of $9.2 million in 2008, a 27 percent increase, according to an Associated Press calculation of figures disclosed in a regulatory filing. But nearly two-thirds of the package came in the form of stock options that currently have little value absent a major jump in the company’s stock price.

Felsinger, 61, had a total compensation package of $7.3 million in 2007.

Felsinger received a salary of $1.1 million in 2008, up 14 percent from the $1 million he received in 2007, and performance-based compensation of $2.5 million, up 25 percent from the $2 million he received in 2007, according to the filing Monday with the Securities and Exchange Commission.

He also received other compensation valued at $167,760, including company matches to 401(k) and other retirement plans and insurance premiums.

But the biggest part of Felsinger’s compensation package came in stock options awarded in January 2008 that were worth $5.3 million when Sempra stock traded above $60 a share. His options package was valued at $3.9 million in 2007.

However, the new options are not of much value unless Sempra’s stock rallies. The price Felsinger would have to pay the exercise the options is $61.41, 46 percent higher than Tuesday’s closing price of $42.13.

Felsinger’s compensation package jumped even as profit for the parent of such companies San Diego Gas & Electric, Southern California Gas Co. and RBS Sempra Commodities remained flat in 2008 at $1.1 billion, or $4.43 per share, compared with $4.16 per share in 2007. Per share profit rose in 2008 because the company had fewer shares outstanding.

Revenue fell to $10.8 billion in 2008 from $11.4 billion in 2007.

The Associated Press formula for calculating executive compensation 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.

Sempra shareholders will be asked at the annual meeting whether they want to vote on an advisory resolution proposed by the company managers to ratify the compensation of the company’s top officers.

The proposal notes that investors are concerned about rising executive pay not linked to performance. The company’s board is advising shareholders to vote against the idea, saying it is confusing and that shareholders already have ways to communicate their concerns with the company.

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