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Eastman Chemical CEO's Compensation Drops In 2008

The Associated Press

NEW YORK (AP) — The chairman and chief executive of Eastman Chemical Co. received compensation valued at $6.3 million in 2008, a nearly 20 percent increase from the previous year, according to an Associated Press calculation of figures disclosed in a regulatory filing.

The Kingsport, Tenn.-based company paid J. Brian Ferguson a salary of $1.1 million, down less than 1 percent from the previous year, and a performance-related cash bonus of $925,000, down 38 percent year over year.

The drop in performance-related cash bonus was largely due to the Eastman Chemical's failure to meet certain earnings targets, the company said.

Ferguson, 54, also received other compensation of $202,179, including $52,544 for personal use of the company jet, $947 for home security and $14,535 for financial counseling.

The decrease in total compensation was partly due to a nearly 19 percent drop in stock- and option-based compensation to $4.1 million when shares and options were issued in January and October of last year. That stock is now worth less due to a drop in the share price.

In 2007 Ferguson received a compensation package valued at $7.9 million.

The AP's calculations of total compensation include salary, bonus, performance-related incentives, perks, any above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. They may vary from totals listed in the summary compensation table in the company's proxy filed with the SEC.

According to an Eastman Chemical proxy filing, the compensation committee benchmarks its executive pay practices against a peer group of companies that includes Dow Chemical Co., DuPont and Nalco Co.

The committee also has established a guideline for Ferguson to own shares having a value of five times his base salary in order to align his interests with those of shareholders.

Eastman makes chemicals that go into a wide array of products, including fibers, plastics and pharmaceuticals.

For the 2008 fiscal year, Eastman's profit jumped to $346 million, or $4.55 per share, from $300 million, or $3.58. Sales fell about 2 percent to $6.73 billion.

The company's stock fell 48 percent in 2008 to close the year at $31.71.