Not all plastics executives and companies took a hit in 2008, with a number of companies rewarding executives for meeting performance targets.
For example, Merit Medical Systems Inc. which posted one-year total shareholder return of 29 percent paid out the full amount of 2008 bonuses to four of its five executives as the firm exceeded targets for sales, gross margins, profit and cost reductions.
It also gave Chairman, CEO and President Fred Lampropoulos a discretionary bonus of $97,500 on top of the $210,000 performance bonus he earned.
The 2008 annual cash bonus opportunities were highly effective motivators for management employees and were instrumental in influencing company performance in 2008, Merit's proxy said.
For 2009, Merit is giving 10 percent pay increases to two of the five members of its executive team, keeping salaries of two others at 2008 pay levels, and giving a microscopic pay hike to Lampropoulos, boosting his salary from $458,730 to $460,000.
The largest one-year payout for performance, $4.03 million, went to Tupperware Brands Corp. Chairman and CEO Rick Goings despite a stock price decline that the firm attributed to overall trends in the market.
Tupperware's reasoning? Sales rose by three percentage points more than the target, and net income, as measured for incentive purposes excluding certain pre-defined items and in constant currency grew by 23 percent compared with a target of 8 percent.
The strong performance of the company in 2008 was reflected in the total compensation of Tupperware's top executives, the proxy said. In addition to Goings' bonus, the firm gave other top executives bonuses of $1.13 million, $905,364 and $410,055, and all four got stock option grants in November. The firm froze executive salaries for 2009, but added that it might consider merit increases later in the year.
With many struggling, some firms also used proxy statements to underscore that their incentive plans were working as intended.
Over the past five years, the annual incentive awards have been paid below target, approximately on target and above target, Pactiv Corp. said in its proxy statement. This variance in results supports the committee's view that the target levels are set appropriately and that the annual incentive awards are truly performance-based. Pactiv made a similar argument for its long-term incentive plan because of the variance in payouts from that plan over the past five years.
Bemis Co. Inc., which aims to provide executives 45 percent of their total compensation from long-term equity, 33 percent from base salary and 17 percent from performance-based annual incentives, made a similar boast.
The compensation committee believes that the simplicity of our executive compensation plan has been instrumental in providing shareholder return even in the midst of the current global economic crisis, the company said.
At Bemis, the short-term plan is based entirely on earnings-per-share growth year over year, with an exception that when sales increase more than 8 percent year over year, there is an additional 10 percent payout.
Bemis also said it had taken steps to strengthen the tie between long-term incentives and performance in 2009.
The committee has redesigned a portion of the long-term equity compensation element, adding a performance measure to 50 percent of the total award, Bemis' proxy statement said.
Starting in 2009, half of the restricted share units will have a time-based vesting period of five years and the other 50 percent will be performance-based with a three-year vesting period.
Bemis said performance-based share units granted under its long-term incentive plan will be based on total shareholder return compared with the change in TSR of the 26 companies in its peer group during the three-year performance period.
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