Clorox CEO's pay down 11% to US$7.4M in FY 2011 because of failure to hit specific financial, strategic, individual goals, AP analysis finds
October 4, 2011
– The CEO of Clorox Co. earned 11 percent less for the consumer product company's most recent fiscal year than he did in 2010, because he missed certain financial, strategic and individual goals for the year.
Donald Knauss' total compensation was worth nearly $7.4 million in Clorox's fiscal 2011, which ended in June. That was down from $8.2 million in fiscal 2010, according to an Associated Press analysis of a regulatory document filed Friday.
Clorox increased his salary 6 percent to $1.1 million. His stock and option awards each increased 5 percent to $2.6 million. Knauss also received perks worth $246,354, including retirement benefits and relocation pay; that was 22 percent more than in 2010.
But his performance-based pay fell 63 percent from nearly $2 million in 2010 to $732,550 in 2011.
The company commended Knauss' ability to lead the company through a difficult economic time but found he only met about half of the financial, strategic and individual goals its board laid out. Those were what determined his performance-based pay.
Clorox, which makes everything from its namesake bleach to salad dressing and Fresh Step Cat Litter, saw its net income fell 7 percent to $557 million as it coped with higher costs for raw materials as cost-conscious consumers cut back or traded down to cheaper brands. The company's annual revenue was flat at $5.23 billion.
Clorox also fended off a takeover effort this year by billionaire investor Carl Icahn. The board rejected multiple bids from Icahn, who also tried to elected his own slate to the board. He withdrew in September.
The Associated Press 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 AP formula does not count changes in the present value of pension benefits. That makes the AP 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.
Knauss has been CEO of the company, based in Oakland, Calif., since 2006. He came to the company from Coca-Cola Co., where he served at times as executive vice president, president and chief operating officer.
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