PROVIDENCE – Textron Inc. slashed the pay of CEO and President Scott Donnelly and three other executives last year, according to documents filed this week with the Securities and Exchange Commission.
Textron reduced Donnelly’s total compensation package to $5.1 million in 2009, a 77 percent drop from the $21.9 million he received in 2008, when he was president and chief operating officer. Donnelly took the reins of the company in December 2009.
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Donnelly’s 2008 compensation was inflated by payments made to offset the money he gave up by leaving his position as president and CEO of General Electric Co.’s aviation unit to come to Textron.
John Butler, Textron’s executive vice president for administration and chief human resources officer, saw his compensation trimmed to $2.4 million, down from $3.9 million in 2008.
Terrence O’Donnell, executive vice president and general counsel, had his compensation cut to $1.6 million, down from $4.8 million in 2008. And board chairman Lewis Campbell, who stepped down as CEO in 2009, saw his compensation reduced to $6.8 million from $10.3 million.
The pay cuts come after a difficult year for the company that saw the company record a $31 million net loss as sales of corporate aircraft slid amid the recession.
The company also said in its filing that its board was suggesting shareholders amend the company’s certificate of incorporation to create a board of directors with annual elections to replace the staggered terms now in place.
The current system, the board said, is in place to help prevent a hostile takeover because it would take years to gain a majority on the board.
“The board believes that, when shareholders initially approved instituting the company’s classified board structure in 1983, most shareholders shared these views of the benefits of a classified board,” the filing said.
“However, the board acknowledges the growing sentiment, particularly in the institutional investor community, in favor of annual elections and believes that the board would continue to be effective in protecting shareholder interests under an annual election system,” it continued.
Additional information is available at textron.com.
