HARRISBURG, Pa. (AP) — The chief executive of The Hershey Co. received a more than 40 percent hike in his compensation in 2008, a year when the chocolate maker seemed to shake off a two-year slump but lost the mantle of America's largest candy maker.
David J. West received compensation valued at $6.2 million from Hershey in his first full year as president and CEO after taking over in a late 2007 shake-up prompted by lackluster sales. He also benefited from a reinstatement of his performance bonus after not receiving one in 2007.
West, who was promoted from chief operating officer, poured money into marketing the company's core products, including Hershey chocolate bars, Hershey's Kisses and Reese's, to try to revive sales and recapture lost market share.
The company also weathered a flap after it came out that Hershey was cutting costs by blending cocoa butter substitutes into some of its chocolate candy. In October, the privately held Mars Inc. leapfrogged Hershey as America's largest candy maker with its $23 billion purchase of mint and chewing-gum giant Wm. Wrigley Jr. Co.
Hershey remains America's largest chocolatier, and West's strategy of restoring marketing and advertising muscle seemed to be working: Fiscal 2008 sales rose nearly 4 percent from 2007, and the companyshowed improvements in profit margin and market share.
The company's stock price dropped 12 percent in 2008 — $39.45 to $34.74 — but nothing like the nearly 33 percent lost by the Dow Jones Industrials or the S&P 500's 38 percent fall.
West, 45, received compensation valued at $4.4 million from Hershey, according to Hershey's annual proxy filing Monday with the Securities and Exchange Commission.
He received $1 million in salary and $86,966 for perks that included personal use of the company's aircraft, contributions to retirement plans and financial counseling, as well as stock and option awards valued at $4 million when they were granted last year.
He also received a performance award of $1.1 million, based on fulfilling the company's business plan and goals, such as annual revenue growth of at least 3 percent.
To calculate West's bonus, the board's compensation committee decided to multiply West's salary by the company's 112.84 percent performance score against its established goals for earnings per share, revenue and cash flow.
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of the pension benefits and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.
