Hershey CEO West receives 2009 compensation of $6.4M, 3 pct boost in good year for candymaker

Hershey CEO receives 2009 compensation of $6.4M

HARRISBURG, Pa. — Hershey Co. CEO David J. West got a pay package that crept up by nearly 3 percent to $6.4 million during a strong year for the nation’s second-largest candymaker.

West’s base salary remained at $1 million. However, his performance-related bonus doubled in amount after Hershey’s revenue and income performance exceeded its initial expectations in 2009, despite the sluggish economy.

The information was in the company’s proxy filing Monday with the Securities and Exchange Commission.

An Associated Press calculation based on the filing showed that West, 46, received total compensation that the company valued at nearly $6.4 million for the fiscal year that ended Dec. 31, compared with $6.2 million the year before.

The biggest chunk of West’s compensation was $3 million he was awarded in stock and options. The value was $1 million less than 2008.

He won’t get that money all at one time, since some is stock that will be handed out based on Hershey’s stock performance over the next three years, and $1.5 million is stock options.

His performance-based cash bonus was almost $2.3 million, double the amount in 2008, and he got additional compensation of nearly $100,000 in retirement plan contributions.

In addition, he had nearly $1.4 million worth of stock vest in 2009 and didn’t exercise any options.

For all of 2009, sales increased 3.2 percent to $5.3 billion — the company had initially projected a 2 to 3 percent increase — and it eclipsed its income projection of below the 6 to 8 percent range. Discounting one-time charges, Hershey’s 2009 income rose more than 15 percent to $496.8 million.

The Associated Press formula for calculating executive pay 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.

Hershey scheduled its annual shareholder meeting for May 4. In the proxy, Hershey said its board nominated LeRoy Zimmerman for an additional one-year term, thus waiving a requirement that its members not be nominated for re-election after they turn 72. Zimmerman, a former Pennsylvania attorney general, is 75.

He joined the board in 2002 after then-state Attorney General Mike Fisher led a purge of board members who had voted to sell Hershey, which is controlled by the charitable trust of late company founder Milton S. Hershey.