(Reuters) – A decline of 33% was observed in the remuneration of Doug Oberhelman, the Chairman and CEO of Caterpillar, as indicated by a filing with the US SEC on Monday. This was because the company failed to meet the promised profits and performance targets.
The filing indicated that Oberhelman still managed to take home almost $15m in total compensation last year. More than half of the amount was in form of stock options awards. He was the only employee of the company who took a pay cut last year, and like many other workers, he also knew what it was coming.
The world’s largest producer of earth-moving equipment, notified its workers last summer that its short-term incentive plan, the core of its performance-based, profit sharing program, would make its lowest payout since the recession.
In recent updates to the approximately 60,000 participants of the plan, and in quarterly releases to the investors, the company said that it expected the spendings to the program to be as much down as 40 percent in 2013 compared to 2012 clearly reflecting decreased payments to the employees.
Explaining the reasons, the company said that cancellations from mining customers attributed high-margin sales to that sector. This forced the lllinois-based company to reduce its one year earnings to many quarters in a row and also to enforce major cost cuts.
At the end, the company’s earnings per share declined by 32% and were recorded at $5.75 in the year 2013. Though it was much below than the initially forecasted earnings per share of $7 to $9, but still 2013 was one of the best years of the company.