Posted on 06 Apr 2009
Ramani Ayer, chairman and CEO of The Hartford, pulled down $9 million in compensation for 2008 - a large chunk of it from old stock options - as the company's stock price plunged 81 percent during the year and layoffs began.
In addition, Ayer was granted new stock options in February 2008, valued then at $2 million, the company disclosed Friday in a federal filing for its annual meeting. But at an exercise price of $74.88 a share, they'll be worthless unless the stock price climbs considerably from Friday's closing price of $8.74 a share.
Ayer and four other top executives got no payouts under a long-term incentive program, and only one of the five received an annual bonus.
The Hartford Financial Services Group Inc. posted a $2.7 billion net loss in 2008 and has been grappling with investment losses, pressures on its variable annuity business and multiple ratings downgrades.
Ayer's pay package of $9 million compares with nearly $27 million for 2007, which included $12.75 million of value from exercising old stock options.
The 2008 tally included salary that remained unchanged at $1.15 million, restricted stock units that were valued at $2 million and are payable in common shares after three years, and $5.7 million of value from exercising old stock options. The package included $133,943 of other compensation such as company contributions to savings plans, personal use of a company car and financial and tax planning.
The drop in Ayer's pay package may not appease some shellshocked shareholders, but company spokeswoman Shannon Lapierre said his compensation fell more than 70 percent when calculated under certain federal rules.
"The Hartford's compensation model is pay-for-performance driven, and total compensation for the company's named executives was significantly lower in 2008 than in 2007," Lapierre said.
Thomas M. Marra, who will retire July 3 as president and chief operating officer, had $2.37 million of compensation for 2008, down from $6.64 million in 2007. He was granted new options in early 2008 valued at $1.33 million.
Marra's 2008 package included a $990,000 salary, restricted stock units valued at $1.33 million and $44,379 of other compensation.
A 2008 pay package of $2.7 million, including a $950,000 annual bonus, was awarded to Neal S. Wolin, former president of the property-casualty operations. He left the company in February to become deputy counsel for economic policy in the White House and then was nominated by President Obama as deputy Treasury secretary.