Gap Inc. chief executive officer Glenn Murphy’s 2013 compensation fell nearly a quarter as his stock awards and cash bonus both declined.
Murphy’s total reported compensation was $18.7 million, 24 percent below the $24.6 million reported for 2012, according to Gap’s definitive proxy filed this week with the Securities and Exchange Commission. Murphy has been chairman and ceo of Gap since August 2007.
His salary was unchanged at $1.5 million while his cash bonus — or non-equity incentive plan compensation — fell 40.5 percent to $2.7 million from $4.5 million a year ago, when he received the highest amount possible under Gap’s compensation plan.
Combining salary and bonus, the cash portion of his compensation fell 30.4 percent to $4.2 million from $6 million in 2012.
The cash bonus is calculated based on a formula involving both sales and earnings for the year covered. Last year, Gap’s net income rose 12.8 percent to $1.28 billion while sales grew 3.2 percent to $16.15 billion and comparable sales increased 2 percent, led by a 3 percent gain at the Gap division.
About $4 million of the about $6 million decline in Murphy’s total compensation came from a reduction in his stock awards, which fell 22.3 percent to $14.2 million from $18.3 million. Gap provides these awards based on two- and three-year averages in its business metrics. Because of vesting schedules and fluctuations in stock price, the amounts indicated in the proxy might not be realized, but the SEC requires that they be reported at grant date fair value.
Murphy’s “other compensation” fell 2.7 percent to $351,000, despite a doubling of funds allocated for his personal use of corporate aircraft to $112,000 from $56,000 in 2012.