Gap Chief Executive gets compensation worth $5 million in 2009, down 7 percent from 2008

Gap CEO receives compensation worth $5M in 2009

NEW YORK — The chairman and chief executive of Gap Inc. received 2009 compensation valued at about $5 million, down 7 percent from a year ago, according to an Associated Press analysis of data filed with regulators Tuesday.

Glenn Murphy, 48, took a temporary 15 percent paycut in his base salary during the year — from $1.5 million to about $1.3 million — as part of a company-wide effort to cut costs. That reverts back to $1.5 million in the current fiscal year.

He received a performance-based bonus of $3.6 million but no stock and option awards, similar to 2008. Murphy also received other compensation totaling $163,382, including $91,894 for personal use of the company’s airplane, $13,500 for financial counseling, $42,238 for a company match to a deferred compensation plan, and various other perks and benefits including a 401(k) plan match, disability plan, life insurance and gift matching.

In 2008, Murphy, who became CEO in August 2007, earned about $5.4 million.

The Associated Press 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, bonus, performance-related 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, making the AP total different in most cases than the total reported by companies to the Securities and Exchange Commission.

Gap, based in San Francisco, worked in 2009 to boost sluggish sales by improving the clothing and prices at its lower-priced Old Navy chain. Sales across all three of its brands — including Gap and Banana Republic — have increased.

Gap’s full-year profit rose 14 percent to $1.1 billion, or $1.58 per share. For the year, sales in stores open at least one year fell 3 percent, but total revenue climbed 4 percent to $4.24 billion.

During the fiscal year ended Jan. 30, shares rose about 58 percent.