PLEASANTON (AP) — Safeway CEO Steve Burd took a slight pay cut in 2012 as the grocery store operator cut his performance-based bonus.
The Pleasanton, Calif.-based company gave Burd a pay package worth $9.91 million for the year, which was down 1 percent from the $9.97 million he was given in 2011, according to an Associated Press analysis of a filing with the Securities and Exchange Commission.
The compensation included $1.5 million base salary, which was unchanged from the previous year. Burd was also given $5.7 million in stock awards and another $1.3 million in option awards. Taken together, that was more than the $6.13 million in option awards he was given the previous year.
But Burd's annual incentive pay — which is based on certain performance metrics for the company — fell to $1.3 million, from $2.2 million the previous year. The drop came as Safeway saw sales at established stores edge up 0.5 percent during the year, compared with an increase of 1 percent in 2011. The figure is a key indicator of a retailer's health because it strips out the impact of newly opened and closed locations.
All other pay for Burd in 2012 came to $173,266 and covered costs for use of a company aircraft, a company car and security equipment in his home.
Safeway announced earlier this year that the 63-year-old Burd would retire in May after more than 20 years with the company. Burd, who started at Safeway in 1992 as president and became CEO a few months later, has said he wants to spend more time pursuing work in health care, which has been a focal point for the grocery chain in recent years.
Like other traditional supermarket chains, Safeway Inc. is trying to evolve as big-box retailers, drug stores and dollar stores expand their grocery sections and chip away at its business. In addition to a loyalty program tailored to customers' buying habits, Safeway has responded in part by developing the health and wellness services it offers through its pharmacies.
About three quarters of Safeway's more than 1,600 stores in the U.S. and Canada have pharmacies.
The Associated Press formula for executive compensation takes into account salary, bonuses, perks, above-market interest 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, which makes the AP total slightly different in most cases from the total reported by companies to the SEC.
The value that a company assigned to an executive's stock and option awards for 2012 was the present value of what the company expected the awards to be worth to the executive over time. 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.