RICHMOND, Va. (AP) — Philip Morris International Inc., the world's second-biggest cigarette company, awarded its CEO Andre Calantzopoulos a compensation package valued at about $10.9 million for fiscal 2013, according to an Associated Press analysis of a regulatory filing.
The pay package came in a year when the seller of Marlboro and other brands overseas saw its profit fall 2.5 percent to $8.58 billion. Revenue excluding excise taxes fell less than 1 percent to $31.2 billion. Shipments fell 5 percent to 880.2 billion cigarettes.
The compensation deal was disclosed in the company's annual proxy filing with the Securities and Exchange Commission on Thursday.
Calantzopoulos' salary was nearly $1.6 million and he received a $2.7 million performance-based bonus. He also received stock awards valued at $6.6 million and other compensation worth more than $84,000.
The 56-year-old became the company's chief executive following its annual shareholder meeting in May 2013. Calantzopoulos had previously served as chief operating officer since March 2008.
Second in size only to state-controlled China National Tobacco Corp., Philip Morris International was spun off in 2008 from Richmond, Va.-based Altria Group Inc., owner of Philip Morris USA, which sells Marlboro and other Philip Morris brands in the U.S.
Philip Morris International, which has offices in Lausanne, Switzerland, and New York, also announced that it will hold its annual meeting on May 7 in New York, where shareholders will elect 10 directors to its board and vote on two shareholder proposals, including one to stop animal testing.
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 2013 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://www.twitter.com/MLFelberbaum.