RICHMOND, Va. — Marlboro maker Altria Group Inc.’s incoming CEO Martin J. Barrington received a pay package valued at $10.3 million for fiscal 2012, according to an Associated Press analysis of a regulatory filing.
The pay package came in a year when the Richmond, Va.-based owner of the nation’s biggest cigarette maker, Philip Morris USA, saw its net income grow 23 percent to $4.18 billion. Revenue excluding excise taxes rose 5 percent to $17.5 billion. Cigarette volumes were essentially flat at 134.9 billion cigarettes. Its full-year U.S. retail share increased 0.8 percentage points to 49.8 percent of the market. Smokeless tobacco volumes grew about 4 percent and it claimed 55.4 percent of the U.S. retail market.
The compensation deal was disclosed in an annual proxy filing with the Securities and Exchange Commission filed Thursday.
Barrington’s salary was $1.03 million, his performance-based bonus was $2.5 million and the value of his stock awards was $6.6 million.
The 59-year-old Barrington, who took over as chairman and CEO last May after serving as vice chairman, also received other compensation worth $199,435, including $102,524 the company put into a defined-contribution retirement plan, $53,056 for the personal use of the company’s aircraft, $20,123 for a car allowance, as well as $10,432 for personal security.
His compensation the prior year as vice chairman amounted to $3.7 million.
The company also announced that it will hold its annual meeting on May 16 in Richmond, where shareholders will elect 11 directors to its board.
In addition to Philip Morris USA, Altria owns U.S. Smokeless Tobacco Co., maker of brands such as Copenhagen and Skoal, and Black & Mild cigar maker John Middleton Co. The company also owns a wine business and holds a voting stake in brewer SABMiller.
The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that 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 2012 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.