Cigarette maker Lorillard CEO Orlowsky’s compensation falls to $9.8 million in 2009

Lorillard’s Orlowsky made $9.8M in ‘09

RICHMOND, Va. — Lorillard Inc. CEO Martin L. Orlowsky made $9.8 million last year, about 36 percent less than in 2008, as the nation’s third-biggest tobacco company struggled with falling cigarette sales, according to a calculation by The Associated Press.

The maker of Newport, Kent, True and Maverick cigarettes saw its profit grow 7 percent in fiscal 2009 to $948 million. Its revenue excluding excise taxes grew 5.6 percent to $3.69 billion.

Like the nation’s other major tobacco companies, Lorillard, which is based in Greensboro, N.C., raised cigarette prices to make up for sales drops blamed on the economy and a 62-cent-per-pack federal tax increase that began in April.

Compared with 2008 — when Orlowsky’s pay package was worth $15.3 million — he received no bonus but he did get a cash incentive of $3.9 million, more than quadruple what he got in 2008. His 2008 bonus of $10.8 million was related to Lorillard’s spinoff from Loews Corp.

In 2009, Orlowsky’s base salary was $1.2 million, a 45 percent decrease from the $2.2 million he got in 2008.

Most of the remainder of Orlowsky’s 2009 compensation came from stock options and awards valued at $4.6 million, up from about $687,000 in 2008.

Orlowsky, who has led Lorillard since January 1999, got other compensation worth $109,401 in 2009, including $77,792 in dividend payments, $21,810 in cash for unused medical and other benefits and a $9,800 matching contribution to a retirement plan.

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 from the total reported by companies to the Securities and Exchange Commission.

Lorillard’s annual shareholders meeting is May 20.