Boss was paid less

Aegon heir Shepard, the Baltimore guy, far out-earned CEO

U.S.-European salary gap

March 30, 2002|By William Patalon III | William Patalon III,SUN STAFF

Aegon NV executive Donald J. Shepard, the Baltimore man who next month takes over as chief executive officer of the Dutch insurance giant, last year was paid nearly 50 percent more than the man he is to succeed, according to the company's annual report.

Shepard, currently chairman and CEO of Aegon USA Inc., received nearly $2.4 million last year. That was down about 9 percent from what he was paid the year before, but was still about 48 percent more than current Aegon NV Chairman and CEO Kees J. Storm was paid, the annual report states.

Plans call for Storm, 59, to transfer the CEO's title to Shepard after Aegon's shareholders meet on April 18. Storm intends to retire in July.

Aegon USA officials declined to discuss the compensation figures.

"I don't think this is something we would want to comment on," said a spokeswoman for Aegon USA in Baltimore.

Shepard - the only American member of the company's top management team - was named Storm's successor in November. Shepard was paid about $2.39 million last year: approximately $970,000 in salary, $1.15 million in bonuses and $272,000 in pension contributions. That total was about 9 percent less than the $2.64 million he received in 2000, a decline that was attributed to a smaller pension contribution last year.

Storm, by comparison, had total compensation of about $1.153 million in 2001, a year in which The Hague, Netherlands-based insurance company saw its profit leap 16 percent. That jump in performance was one reason for the 4.3 percent increase in his total pay package from 2000 to 2001, according to the company.

The gap between the earnings of Shepard and Storm illustrates the bigger pay packages U.S. executives command than do their overseas counterparts - as well as the lengths to which experts say that foreign companies must sometimes go to attract top U.S. management talent.

According to Aegon, when Shepard assumes the helm of the parent company next month, the top job at the U.S. subsidiary will be filled by veteran insider Patrick S. Baird.

Baird, currently executive vice president and chief operating officer of Aegon USA, has been with the insurance company for more than 20 years.

Before he became COO of the insurance company's U.S. arm, Baird has served as director of tax and chief financial officer, and a key focus of his has been mergers and acquisitions.

His new title will be president and CEO of Aegon USA, and he will join that unit's board of directors. The promotion is effective April 19, the company said.

"Pat has been an important factor in the extraordinary growth that Aegon USA has achieved over the past decade," Shepard said.

"He has been the point man on all of the significant acquisitions of Aegon USA and has been a major contributor to our internal growth. Pat's contribution to our success, knowledge of our business and ability to manage diverse operations will continue to benefit Aegon in the future," Shepard said.

According to the company, Baird holds a bachelor of business administration degree from the University of Iowa and is a certified public accountant.

Baird is a resident of Cedar Rapids, Iowa, and is a member of the boards of directors of the Kirkwood Community College Foundation, Priority One, Waypoint and the Regional Health Care Alliance.

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