United Parcel Service gave four of its top executives 10 percent pay raises and extra stock awards that will likely be worth hundreds of thousands of dollars each.
The pay committee on the Atlanta shipping company’s board of directors said it boosted the pay and future pay targets of CEO David Abney and other top executives “to improve the competitiveness of UPS executive compensation.”
The pay changes affected the compensation of Abney, Chief Financial Officer Richard Peretz, Chief Commercial Officer Alan Gershenhorn, and Myron Gray, president of UPS's U.S. operations. Peretz became CFO in July, 2015.
Last year, Abney got $11.3 million in total compensation, close to the median CEO pay last year at big Georgia companies. Peretz got almost $1.5 million; Gershenhorn got $4.3 million; and Gray got $2.8 million.
The pay raises were three-fold: all of the executives got a 10 percent salary raise, and most also got extra “one-time” grants of stock options and compensation tied to the company’s stock price and other criteria, according to a company filing to the U.S. Securities and Exchange Commission.
The stock incentives “vest,” or convert to the executives’ ownership, over time and after they meet certain performance goals.
As a result of the board’s action on Sept. 16, most of the executives also got bigger pay targets that will likely result in bigger bonuses and stock awards in the future. Those awards are based on a multiple of their salaries. The board raised both the executives’ salaries and most of their multipliers used to determine bonuses and stock awards.
For instance, Abney’s salary was just over $1 million last year, but his “target” stock award is now 700 percent of his salary and his stock option “target” is 90 percent of his salary. Last year, they were 675 percent and 45 percent, respectively.
Often, executives' actual awards exceed their targets if the board decides they beat their goals. Last year, Abney got stock awards valued at $7.9 million and $450,019 worth of stock options.
About the Author
