RICHMOND, Virginia — Energy provider Dominion Resources Inc. awarded its CEO a pay package valued at $17.3 million in fiscal 2014, up 59 percent from the previous year, according to an Associated Press analysis of a regulatory filing.
The compensation package from Thomas Farrell II came in a year when the Richmond, Virginia-based company's net income fell nearly 23 percent to $1.3 billion compared with $1.7 billion a year ago. But its operating earnings, which Dominion uses as its primary performance measurement, increased 5 percent to $2 billion. Revenue fell 5 percent to $12.4 billion.
Dominion produces electricity and has the nation's largest natural gas storage system. It serves retail customers in 12 states.
The bulk of the increase in pay came from a 95 percent jump in Farrell's performance-based bonus, which totaled $10 million.
His salary increased 5 percent to about $1.41 million and his stock awards were valued at $5.7 million.
The 60-year-old, who has served as chairman, president and CEO since April 2007, also was given other compensation worth about $176,000, which included personal flights on company-owned planes and company car allowances.
In 2013, Farrell's compensation was valued at $10.9 million.
Dominion also said it will hold its annual shareholders meeting May 6 in Glen Allen, Virginia, where shareholders will elect 10 directors to Dominion's board.
Dominion shareholders also will consider seven proposals, including one asking Dominion to adopt goals for reducing greenhouse gas emissions and reports on climate change, biomass and methane emissions.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2014 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
Michael Felberbaum can be reached at http://twitter.com/MLFelberbaum.