Constellation Energy Group reported Wednesday that Chief Executive Officer Mayo A. Shattuck III's total compensation for 2008 was $15.7 million, an increase from a year earlier attributed largely to changes in the accounting value of his pension.
But company officials argued that a more precise value of last year's compensation shows Shattuck earned about $7.8 million, half of what he did in 2007.
Shattuck did not receive a bonus or an increase in his base salary for the year in which Constellation flirted with bankruptcy and its stock plunged 75 percent. The Constellation chief's compensation includes a $1.3 million base salary and a host of stock options and incentives that materialize if the company's shares rise. Constellation stock closed at $23.31 yesterday on the New York Stock Exchange, up 76 cents.
Baltimore-based Constellation is the parent of Baltimore Gas and Electric Co., the state's largest utility. Constellation, which has agreed to sell half of its nuclear power business to Electricite de France for $4.5 billion to help it avoid bankruptcy, has laid off hundreds of workers, slashed its stockholder dividend and is seeking rate increases for its BGE customers.
Shattuck announced earlier this year that he would forgo any bonus payment for 2008, calling the decision a "modest and firm signal that I'll do all that I can do to help steer this great company back to health with renewed growth." He announced the move just as Constellation reported a $1.4 billion loss in the fourth quarter of last year. Shattuck received a $5.5 million bonus in 2007 and $10.8 million the year before.
Company directors, mindful that executive salaries have been points of controversy amid the declines in the economy and stock market, said they agreed not to award Shattuck a bonus because of the company's performance, but left his salary and other stock-based compensation intact to show their confidence in him to lead the company out of its recent troubles.
"He has the total support of the board and total support of myself as chair of the compensation committee," said Constellation board member Robert J. Lawless, who heads the group of directors that sets executive pay.
In documents filed Wednesday with the Securities and Exchange Commission, Shattuck's compensation included a $10.3 million rise in the value of a pension that company officials said he is not yet eligible to receive.
Regulators began requiring companies to report changes in pension values as part of total pay three years ago, said Steven Hall, head of executive-pay consulting firm Steven Hall & Partners in New York.
While the figures are part of total compensation, "you really can't compare them between different people that well," because of difference in age, interest-rate assumptions and other variables, he said. Nevertheless, in Shattuck's case, Hall added, "it's a big number no matter what."
The compensation package for Shattuck was awarded for a year in which the company was pushed to the brink of bankruptcy by a crippling shortage of credit that threatened to swamp the company's tenuous commodities trading business. Constellation was rescued by a $1 billion infusion from billionaire Warren E. Buffett's MidAmerican Energy Holdings Co., which swept in with an offer to buy the company for $4.7 billion.
Constellation ultimately withdrew from the MidAmerican takeover deal, choosing to remain an independent company and instead sell half its nuclear power business to French utility EDF for $4.5 billion. Canceling the deal with MidAmerican cost Constellation $593 million in termination fees and 10 percent of the company's stock.
The MidAmerican deal negotiated by Shattuck and other company officials also called for paying some Constellation executives $32 million in performance and retention payouts - payments that carried over into the deal with EDF. But those bonuses were terminated earlier this year amid sharp public criticism.
Shattuck's $14 million compensation package for 2007 made him the highest-paid executive in the Baltimore area at the time, according to an analysis by The Baltimore Sun. It is unclear where he would rank today because several of the area's corporations have not reported executive pay for 2008. Black & Decker reported compensation for Chief Executive Officer Nolan D. Archibald of $13.6 million.
Baltimore Sun columnist Jay Hancock contributed to this article.