(The Associated Press circulated the following article on March 29.)
OMAHA, Neb. — Union Pacific President and Chief Executive Jim Young received compensation the company valued at $13,043,583 in 2006 while the nation’s largest railroad continued to reap robust profits.
Most of Young’s compensation came in the form of stock and options grants with an estimated value of $9.7 million at the time they were granted, according to a filing with the Securities and Exchange Commission Tuesday. Young also took on the duties of chairman of the board in February after Dick Davidson retired.
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 total may vary from totals that companies report.
In his last year with the railroad, Davidson was also one of its highest paid executives, receiving compensation the company valued at $4,376,619 in 2006, including a $2.5 million bonus and personal flights on company planes worth $312,350.
At the end of 2006, Davidson’s pension benefits were worth $31.3 million dollars. He started collecting those when he retired Feb. 1.
The railroad also gave Davidson $200,000 to set up an office and hire office staff when he retired. He will receive $10,000 a month for the rest of his life to support that office.
Union Pacific said its 2006 net income jumped 57 percent to $1.606 billion, or $5.91 per share, as the railroad worked to become more efficient. And Union Pacific is still enjoying strong demand for the agricultural products, coal and other goods that it ships.
The company cited last year’s profit figures and improvements in efficiency and safety in the filing to justify the salary and bonuses the railroad executives received.
“Our company’s achievements in 2006 reflect the leadership and efforts of our senior management team under the direction of Mr. Young, our CEO,” the company said.
Young, Davidson and the railroad’s three other top executives all received bonuses in 2006, and all the top executives who didn’t retire either received raises last year or early this year.
Young’s $1 million salary increased to $1.1 million in January, and he received a $2.25 million bonus.
Dennis Duffy, executive vice president for operation of the railroad, received a $56,667 raise in September to make his salary $575,000. He also received a $915,000 bonus in 2006 and stock and options grants worth nearly $2.6 million.
Robert Knight, executive vice president of finance, has received two raises since September to bring his salary to $420,000. He also received an $800,000 bonus in 2006 and stock and options grants worth $1.63 million.
J. Michael Hemmer, the railroad’s general counsel, has also received two raises since September to make his salary $443,000. He also received a $725,000 bonus in 2006 and stock and options grants worth $1.65 million.
Omaha-based Union Pacific Corp. operates Union Pacific Railroad. It is the largest railroad in North America with 32,400 miles of track covering 23 states.
The company said it will hold its annual shareholder meeting May 3 in Salt Lake City, where the railroad was incorporated, even though company headquarters are in Omaha.
Shareholders will be asked to reconsider a proposal they rejected last year that would force the company to make regular disclosures of political contributions in reports separate from government filings.
The proposal, made by New York City public workers with pension investments in Union Pacific, would promote transparency and accountability. The group said Union Pacific contributed at least $237,500 during the 2003-04 election cycle.
The company has opposed the measure because political donations already are disclosed in filings with the Federal Elections Commission, and Union Pacific says political contributions benefit the company.