NCR has changed part of an incentive award intended to keep its CEO at the company, after a corporate governance group suggested shareholders vote against the leader’s compensation package at the Duluth company’s annual meeting Wednesday.
An analyst who follows NCR said the decision -- which came after “constructive conversations” with shareholders, according to an NCR filing -- reflects the trend of shareholders speaking out against compensation they feel was not earned.
The company decided in January to give CEO Bill Nuti 107,031 shares of restricted stock that would vest in 2014 if he stayed with the company. NCR called him an “outstanding leader” who is “highly marketable” in a recent filing.
This week, NCR added additional performance restrictions to Nuti’s restricted stock package. To receive the award, Nuti must also achieve a 2013 operating profit that the company did not publicly define. Shareholder return also must meet or exceed the median for the company’s peer group for a two-year period that ends in 2013.
NCR spokesman Mark Scott said he could not comment beyond the regulatory filing in which the change was disclosed.
Nuti’s total 2011 compensation was $11.71 million in 2011, including $1 million in base salary. His compensation fell 4 percent from 2010.
Gil Luria, an analyst with Wedbush Securities, said compensation has become a sore topic for investors. As part of the 2010 federal financial reform, shareholders have been asked to approve CEO pay packages in non-binding votes.
“For some companies, it’s been an issue, and NCR is one of them,” Luria said. “It seems to be happening more and more.”
Citigroup shareholders on Tuesday voted down the CEO’s $14.9 million compensation package.
Luria said he expects the question of fairness in compensation to come up for more companies. He said others may also negotiate changes with top shareholders before the vote to minimize discord.
“I expect companies to be more cautious,” he said.
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