RICHMOND, Va. (AP) — Energy provider Dominion Resources Inc. awarded its CEO a compensation package valued at more than $8.2 million in fiscal 2012, down more than 20 percent from the previous year, according to an Associated Press analysis of a regulatory filing.
The pay package for Thomas Farrell II came in a year when the Richmond-based company's net income fell 79 percent to $302 million on costs related to certain power stations the company put up for sale, the planned shutdown of one of its nuclear power stations, costs from storm-related power restoration and other charges.
Its revenue fell 7 percent to $1.31 billion. However, operating earnings, which Dominion uses as its primary performance measurement, remained flat.
Dominion produces electricity and has the nation's largest natural gas storage system. It serves retail customers in 15 states.
The compensation deal was disclosed in an annual proxy filing with the Securities and Exchange Commission.
The bulk of the drop in pay came from a more than 56 percent decrease in Farrell's performance-based bonus, which totaled $3.2 million.
His salary increased 7 percent to $1.3 million and his stock awards were valued at $3.5 million.
The 58-year-old, who has served as chairman, president and chief executive officer since April 2007, also was given other compensation worth $186,699, which included personal flights on company-owned planes and company car allowances.
In 2011, Farrell's compensation was valued at $12.2 million.
Dominion also said it will hold its annual shareholders meeting May 3 in Richmond, where shareholders will elect 12 directors to Dominion's board.
Dominion shareholders also will consider proposals, including one asking Dominion to produce a report on the impact and timing of a policy to end the use of mountaintop coal removal and another asking it to implement a policy to minimize the storage of nuclear waste in spent fuel pools.
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.
Michael Felberbaum can be reached at http://twitter.com/MLFelberbaum.