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Iacocca's Big Going-Away Gift : Automobiles: An SEC filing shows that he was paid $12.2 million in his last year as CEO. Other Chrysler execs did well too.

March 26, 1993|DONALD. W. NAUSS | TIMES STAFF WRITER

DETROIT — Former Chrysler Corp. Chairman Lee A. Iacocca can afford retirement.

The auto maker paid its colorful former chief executive $12.2 million in 1992 and also handsomely rewarded its other top executives, according to a federal filing.

Chrysler, the only U.S. auto maker to report a profit last year, paid Vice Chairman Robert J. Eaton, who succeeded Iacocca in January, $7.4 million in 1992, according to a preliminary proxy statement filed with the Securities and Exchange Commission this week.

The compensation figures are the first reported by the auto maker under new disclosure rules adopted last year by the SEC. The regulations require companies to value stock options at current values, thus making it easier to determine and compare executive pay.

The lucrative packages prompted some immediate criticism of Chrysler, which made $723 million last year after losing $795 million in 1991.

"Apparently, Chrysler's longstanding tradition of wretchedly excessive compensation for Lee Iacocca continued in 1992," said Stan Marshall, vice president of the United Auto Workers union.

But company spokeswoman Karen Stewart said the pay reflected a well-thought-out compensation plan that ties financial incentives to the company's performance.

"They are rewarded commensurate with their performance," she said.

Stewart also noted that other Chrysler employees have benefited by the company's recent performance. This month, the company gave hourly and salaried workers profit-sharing checks averaging $429, the first such bonuses paid since 1989.

Iacocca and the other top Chrysler executives did much better. The former chairman's 1992 pay was more than four times the $2.98 million he took home in 1991. But it does not approach the $20.5 million he collected in 1986.

Last year, Iacocca received a salary of $885,000, bonus of $600,000 and $43,305 in other compensation. He also received $1.14 million in long-term incentive pay and 130,000 stock options valued at $1.02 million.

The remainder came from 250,000 Chrysler shares he was awarded Dec. 31 as an incentive for staying past his normal retirement date in 1991.

The company valued the shares at $32.125 each, or a little more than $8 million. Iacocca, 68, was also paid $412,500 in dividends on that stock and $33,514 in interest on the dividends.

Chrysler's stock Thursday rose 62.5 cents to $39.375 a share on the New York Stock Exchange as it has continued to thrive on the strength of its Jeep, minivans and LH series automobiles.

Iacocca is credited with playing a big role in Chrysler's latest surge. He rescued the company from bankruptcy in the early 1980s, oversaw its stumble later that decade and then rode it back up just before his retirement. He remains on the board as a $500,000-a-year consultant.

The United Shareholders Assn., a Washington-based stockholder rights group, said the key in judging the fairness of executive salaries is looking at whether the pay is tied to financial results.

"If the pay is tied to performance, we are not opposed to options and incentives," a United Shareholders spokeswoman said.

Chrysler's proxy includes a four-page outline of its executive compensation program. It notes that more than 60% of the total compensation paid in 1992 "is directly related to the achievement of corporate performance objectives, including profitability." The company points out that it did not pay bonuses in 1991 when it lost money.

Eaton, who was vice chairman and chief operating officer in 1992, became chairman and CEO when Iacocca stepped down. Last year, he was paid $597,000 in salary, $575,000 in bonuses and $93,495 in other compensation.

He received $694,000 in long-term incentive pay and 550,000 stock options valued at $5.47 million.

Chrysler President Robert A. Lutz was paid $2.7 million in 1992. Lutz, who now is also chief operating officer, received $650,000 in salary, $450,000 in bonuses and $43,020 in other compensation. He received long-term incentive pay of $711,876 and stock options valued at $871,600.

Lee A. Iacocca

1992 title: Chairman and chief executive

Salary: $885,000

Bonus: $600,000

Stock options: $1,024,400

Long-term incentive pay: $1,142,640

All other compensation: $8,540,039

Total: $12,192,079

Robert J. Eaton

1992 title: Vice chairman and chief operating officer

Salary: $597,000

Bonus: $575,000

Stock options: $5,470,000

Long-term incentive pay: $694,328

All other compensation: $93,495

Total: $7,429,823

Robert A. Lutz

1992 title: President

Salary: $650,000

Bonus: $450,000

Stock options: $871,600

Long-term incentive pay: $711,876

All other compensation: $43,020

Total: $2,726,496

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