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Proxy Mining: Caterpillar Chief Made $17M in 2007, Possibly Half That This Year

Caterpillar's announcement this morning that the heavy-machinery company posted a 32-percent drop in fourth-quarter profits and would cut 20,000 jobs prompted The Ticker to take a look at Cat's executive compensation.

We call this new feature Proxy Mining: In it, The Ticker will mine deep into SEC proxy filings, where companies list their executive compensation, typically a cocktail of base salary, bonuses, deferred compensation, options and other forms of pay.

It's a different world than most of us working stiffs -- who get a paycheck, full stop -- are used to.

Cat hasn't filed its 2008 proxy with the SEC yet. The most recent one available is the 2007 proxy, which you can see in full here.

In 2007, Caterpillar chief executive J.W. Owens received:

- a base salary of $1.5 million
- a bonus of $300,000
- stock awards totaling $918,626
- option awards totaling $7.1 million
- non-equity incentive plan compensation* totaling $4.4 million
- change in pension value and non-qualified deferred compensation** totaling $2.6 million
- other compensation*** totaling $221,307

Total: $17.1 million, up from $14.8 million in 2006.

* This sum represents bonuses that Owens received for hitting short-term goals for Cat from 2005 to 2007.

** This sum represents the increase in value of Owens's pension over the year and compensation Owens can defer to another time for tax purposes.

*** This sum includes company contributions to Owens's 401(k) plan, travel on corporate aircraft, financial counseling and home security.

This year, however, Owens and all other Cat execs are taking a big salary haircut and most of the other (remaining) 112,000 worldwide employees are getting at least a trim.

In December, the p.r.-conscious Cat announced that its top brass will take a pay cut of up to 50 percent.

The pay of senior managers will be cut 5 to 35 percent and other management and support staff will get a pay cut of up to 15 percent. Some will not get their pay cut. Merit pay raises also will be suspended.

Cat has not spelled out how it will cut Owens's compensation by up to half, but presumably it will start by either slashing or zeroing out his base salary and significantly cutting into his option awards, the largest single source of compensation.

-- Frank Ahrens
The Ticker is Twittering!

By Frank Ahrens  |  January 26, 2009; 2:43 PM ET
Categories:  The Ticker  | Tags: Caterpiller, executive compensation, recession  
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