Procter & Gamble Co. (PG:US) Chief Executive Officer Robert McDonald’s compensation declined 6.1 percent last year, reduced by a smaller bonus, as the world’s largest consumer-products company worked to improve growth.
McDonald, who’s been CEO for three years, earned $15.2 million in salary, bonus, stock and options, compared with $16.2 million the previous year, according to a proxy statement filed today. McDonald’s salary remained the same at $1.6 million, while his bonus, stock and option awards decreased.
McDonald has disappointed investors by lowering profit forecasts (PG:US) three times this year and is working to boost sales and execute a plan to save $10 billion by 2016 through cuts in jobs and marketing. In July, activist investor Bill Ackman took a $1.8 billion stake in P&G and plans to push for management changes, people familiar with the matter have said.
“This company continues to kind of be under the gun here,” Jack Russo, an analyst at Edward Jones & Co. in St. Louis, said today in an interview. “The level of urgency has kind of gone up here a little bit,” said Russo, who has a buy rating on the shares.
The company’s top five executives, including Chief Financial Officer Jon Moeller, all received bonuses lower than their targets, according to the filing. McDonald’s bonus shrank to $2.43 million last year, as he missed a target of $3.04 million, from $2.63 million the prior year, according to the filing.
Moeller’s salary increased by $75,000 to $825,000 last year. His total compensation was $5.35 million, a 7.7 percent increase.
P&G, the maker of Tide laundry detergent and Duracell, rose (PG:US) 0.5 percent to $67.02 at the close in New York. The shares have gained 5.9 percent in the past year.
P&G, along with competitors Kimberly-Clark Corp. (KMB:US) and Colgate-Palmolive Co. (CL:US), is paying more for the raw materials used in its products, which range from shampoos and house cleaners to pet foods. The stronger dollar also has reduced the value of their sales abroad at the same time that economies in Europe are slipping into recession.
While P&G has reduced forecasts this year, Kimberly-Clark and Colgate have managed to stick to their projections. The lagging performance prompted Ackman’s Pershing Square to make its stake in P&G its largest initial investment ever. He plans to seek other investors to help push for management changes or asset sales to boost the shares, according to people familiar with the matter.
P&G’s sales (PG:US) in the quarter ended June 30 fell 1.2 percent to $20.21 billion, trailing the $20.25 billion average of analysts’ estimates compiled by Bloomberg.
Executives on the conference call this month said they expected the company to return to long-term growth rates by fiscal year 2014, helped by a strengthening U.S. business.
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