HARTFORD, Conn.—United Technologies Corp. cut CEO Louis Chenevert's compensation nearly 19 percent last year, according to a document it filed with federal regulators. The company praised his performance but said the recession hurt the conglomerate, especially its aerospace business.
Chenevert's compensation of $17.9 million in 2009 was down from $22 million. It included $1.4 million in salary, up nearly 9 percent from 2008, and a $1.7 million bonus that was down from $3 million in 2008.
United Technologies, the parent company of jet engine maker Pratt & Whitney, Otis elevator, Sikorsky Aircraft and other businesses, said how the recession would affect it "was difficult, if not impossible, to project and calibrate at the start of the year."
Chenevert's salary increase reflected a "favorable overall assessment of performance," the compensation committee said in its annual report filed Feb. 26. But -- even after the 2009 increase -- his base salary was slightly below the median of peer group companies, which the committee said is appropriate due to Chenevert's relatively short tenure as CEO.
Chenevert, 52, became chief executive in April 2008.
The committee said Chenevert's bonus was "limited by the constraints of a substantially reduced bonus pool." About 74 percent of his compensation was in stock and options valued at $13.2 million the day they were granted in 2009.
Also included in the compensation was $1.3 million in a performance-based bonus that was down slightly and other compensation of $256,659 that included personal use of the company's plane, insurance premiums and vehicle lease payments.
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC.
The compensation committee set the corporate earnings target at 100 percent of 2008 earnings per share.
"In retrospect, this target was not realistic or achievable in an environment of global recession with extreme adverse impacts on the aerospace and construction sectors," the committee said.
Earnings in 2009 fell 18 percent from the previous year and revenue dropped 11 percent.
"However, UTC demonstrated strong relative performance and effective management response to deteriorating market conditions," the compensation committee said.
The decline in the Hartford-based company's per-share earnings was less than the average of for Dow Jones industrials and less than for a peer group of industrial companies, the committee said.
United Technologies maintained its dividend and the adjusted segment operating margin increased before restructuring and nonrecurring items, the company said. United Technologies responded effectively to the recession with cost reduction and restructuring programs, the committee said.
"In managing the immediate issues presented by the recession, Chenevert and his team maintained focus on the long-term growth and sustainability of UTC's businesses."