This story first appeared in the April 11, 2011 issue of WWD. Subscribe Today.

Tiffany & Co. chairman and chief executive officer Michael Kowalski’s pay package rose nearly 17 percent last year as a hefty increase in his stock awards more than compensated for a reduction in his cash bonus.

Kowalski earned a total of $9.2 million last year, up 16.9 percent from $7.9 million in 2009.

He had a salary of $959,000, down 3.9 percent from the prior year’s $997,000, and his cash bonus — technically nonequity incentive plan compensation — was down 22.5 percent, to $1.6 million from $2 million, as Tiffany surpassed its target earnings number of $315 million but fell short of the $410 million that would have allowed the ceo to qualify for the maximum amount of $2 million.

The firm’s 2010 net income rose 39.1 percent to $368.4 million from $264.8 million in 2009, while net sales rose 13.9 percent to $3.06 billion. Same-store sales rose 8 percent while gross margin declined to 39.8 percent of sales from 40.2 percent.

Kowalski’s stock awards, tied to earnings per share and return on assets, rose 82.9 percent to $2.9 million from $1.6 million while his option awards felt 1.8 percent to $1.5 million. Because of fluctuating stock prices and vesting schedules, these awards aren’t necessarily realized by the named officers, but companies are required to include them in compensation tables when submitting proxies to the Securities and Exchange Commission, as Tiffany did on Friday.

The totals also include $2.1 million to reflect changes in pension value and nonqualified deferred compensation, 32.8 percent above the 2009 level, and other compensation of $167,000, down 0.7 percent.

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