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PPL Chief's Compensation Slips 3.6 Percent In 2008

The Associated Press

NEW YORK (AP) — The chairman, president and chief executive of energy and utility holding company PPL Corp. received compensation valued at $5.6 million in 2008, a 3.6 percent decrease from the previous year, according to an Associated Press analysis of data filed with regulators.

The Allentown, Pa.-based company paid James H. Miller $1.1 million in base salary, up 9.6 percent from the previous year.

Miller did not receive a performance-based cash bonus in 2008, though in 2007 he received $1.6 million.

PPL awarded Miller $59,109 in perks, including $11,420 in financial planning, $6,900 in matching 401(k) contributions and $13,000 for serving on the board of an organization affiliated with the company.

But the bulk of his compensation came in the form of stock- and option-based awards valued at $4.4 million when they were granted in 2008, up 40 percent from similar awards granted during the previous year.

However, the stock awards are now worth much less due to a drop in the company's share price, and the options are currently "underwater." The exercise price on about $1.2 million worth of options is $47.55, well above the stock's Wednesday closing price of $28.74. That means the options are currently of little value absent a major rebound in share price.

In 2007, Miller received total compensation of $5.8 million.

The Associated Press compensation 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, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.

According to PPL's filing, the compensation committee has established a guideline for Miller to own shares having a value of five times his base salary in order to align his interests with those of shareholders.

PPL reported 2008 earnings of $930 million, or $2.47 per share, down from $1.29 billion, or $3.35 per share, the previous year. Revenue grew 24 percent to $8.04 billion, though utility revenue stayed flat at $4.11 billion.

Shares fell 15 cents to $28.59 in afternoon trading. The stock has traded between $24.25 and $54 in the past 52 weeks.