(The Associated Press circulated the following on March 13.)
OMAHA, Neb. — Union Pacific Corp. President and CEO Jim Young received 25 percent less compensation during his second year in the railroad’s top job, even though he received a bigger bonus and the board approved a raise for him.
The main reason Young’s compensation fell to $9.8 million in 2007 from more than $13 million in 2006 is that the stock options and grants he received in 2007 were worth less.
Young received stock options and restricted stock worth about $6 million in 2007, according to a proxy statement filed Thursday with the Securities and Exchange Commission. That’s down from $9.7 million in the previous year.
Union Pacific’s board said Young’s management team delivered better financial results, a better safety record and more efficient operation last year. So, Young and all the railroad’s top executives received bonuses.
The Omaha-based railroad earned $1.86 billion, or $6.91 per share, in 2007. That was up from $1.61 billion, or $5.91 per share, a year earlier. And the railroad generated $16.3 billion of revenue in 2007.
Young received a $2.65 million bonus in 2007, up nearly 18 percent from the $2.25 million he received the previous year.
Young’s $1.1 million salary increased to $1.15 million on March 1.
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 pension benefits, so they may vary from totals that companies report.
The railroad’s board said it decided to make a significant portion of Young’s pay long-term stock incentives because the 55-year-old is just beginning his tenure as chairman and chief executive. So, he received a package of stock awards worth nearly twice his cash compensation.
The company said it will hold its annual shareholder meeting May 1 in Salt Lake City, where the railroad was incorporated, even though company headquarters are in Omaha.
The railroad also said in its proxy statement that the board plans to ask shareholders to approve an increase in the number of shares of stock Union Pacific can issue.
The railroad wants to be able to increase its corporate limit on stock so it can issue as many as 800 million shares instead of the current limit of 500 million.
Union Pacific said it wants the higher limit so the board would have more flexibility to raise money, make investments or consider a stock split.
As of Feb. 21, Union Pacific had 276.4 million shares outstanding.
Shareholders also will be asked to reconsider a proposal they have rejected twice already. The proposal from New York City public workers with pension investments in Union Pacific would force the company to make regular disclosures of political contributions in reports separate from government filings.
The group said Union Pacific has contributed at least $3.3 million since the 2002 election cycle. But the group says Union Pacific’s public disclosures reveal an incomplete picture because they don’t show money given to trade groups for political purposes.
The railroad’s board opposes the measure because it believes the current disclosures are adequate, and Union Pacific says political contributions benefit the company.
Union Pacific operates 32,400 miles of track in 23 states from the Midwest to the West and Gulf coasts.