The chief executive of the nation's biggest cigarette maker received compensation of $11.6 million in 2008 as he took charge of Altria after it had spun off its bigger international unit.
Michael Szymanczyk replaced Louis Camilleri as CEO of Altria Group Inc. as it spun off Philip Morris International at the end of March 2008. Camilleri became CEO of Philip Morris International Inc., the spinoff company that is the world's biggest nongovernmental cigarette maker.
Szymanczyk's 2008 pay was roughly half what Camilleri was given in 2007, according to an Associated Press analysis of a regulatory filing made Thursday. It was also up 29 percent from 2007, when Szymanczyk's total compensation was about $9 million.
Richmond, Va.-based Altria makes Marlboros for the U.S. as well as Parliament and Virginia Slims cigarettes. It also owns a stake in the brewer SABMiller PLC.
Camilleri was CEO of Altria when it began a multi-year restructuring that first led to the spinoff of Kraft Foods Inc. then the separation of the two cigarette makers. Before the spinoff, Szymanczyk was CEO of Philip Morris USA.
Most of Szymanczyk's 2008 pay was given as stock awards that the company valued at $6.7 million when they were granted on Jan. 30, 2008, and April 23, 2008. He was also paid a salary of $1.2 million and a performance-based bonus of $2.8 million.
He also got nearly $1 million in executive perks, including personal use of company planes worth $572,259, reimbursement of taxes on assets held for retirement of $208,860 and a $180,000 deposit to a defined contribution plan.
Altria, which owns Philip Morris USA, is dealing with declining cigarette sales volumes as consumers turn away from smoking and face higher prices from tax increases. Most recently, the federal excise tax on cigarettes rose to $1 per pack from 39 cents on April 1, a move that should translate directly into fewer cigarettes purchased.
In an effort to move beyond cigarettes, Altria and its next biggest rival, Reynolds American Inc., have introduced a number of smokeless products to keep smokers as buyers of other types of tobacco. They are trying to convert smokers to using smokeless alternatives such as moist snuff, chewing tobacco and snus. Snus are teabag-like pouches that users stick between their cheek and gum.
Altria completed its $10.4 billion acquisition of smokeless tobacco company UST Inc. in January, giving it market-leading brands such as Skoal and Copenhagen. Earlier, it bought the John Middleton cigar company, maker of the Black & Mild brand.
Altria's profit for 2008 fell 50 percent, reflecting the spinoff of the international business. Net income dropped to $4.93 billion, or $2.36 per share, from $9.79 billion, or $4.62 per share. Revenue rose 4 percent to $19.36 billion.
The Associated Press compensation formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, any bonuses, 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 pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
The company also said it would hold its annual meeting on May 19 at a convention center in Richmond.