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Caterpillar executive compensation down in 2020 due to pandemic impact

Caterpillar executive compensation down in 2020 due to pandemic impact

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The COVID-19 pandemic had a significant impact on the 2020 compensation for Caterpillar Inc.’s top-five executives, the company reported in its annual proxy filing.

With the U.S. and global economies being adversely affected during the first months of the pandemic, Caterpillar’s board of directors responded by cancelling incentive pay and providing a minimal salary raise for 2020.

James Umpleby III, the company’s chairman and chief executive, received a 1.6% increase in salary to $1.6 million.

Over the past two years, Umpleby went from $4.74 million in incentive pay in 2019 to $2.34 million in 2020 to no incentive pay in 2021.

For 2020, Umpleby received stock awards and stock-option awards valued at $11.8 million on the date they were awarded, down from $12.15 million a year ago.

He also received $276,582 in all other compensation, of which $219,060 was a company contribution to a supplemental deferred compensation plan, along with the use of company aircraft valued at $20,352.

Altogether, Umpleby’s total compensation was down 16.4% to $13.68 million.

Another major factor in the total compensation for Umpleby and the other top-five executives is that none received pension and deferred compensation gains during 2020.

When factoring in an $18.16 million gain in the value of his pension and deferred compensation, Umpleby received $34.52 million in overall total compensation for 2020. Most analysts do not include pension and deferred compensation in their executive pay models.

Caterpillar reported its chief executive pay ratio for 2019 was $274-to-$1 when factoring $13.68 million in overall total compensation and a $49,847 salary as the median annual employee compensation. Median is defined as the middle value in a list of numbers.

For fiscal 2020, Caterpillar had just under $3 billion in net income, down from $6.09 billion in fiscal 2019.

The company operates a $426 million plant in Winston-Salem. The latest workforce count from Caterpillar is 160 full- and part-time employees with its Progress Rail subsidiary that took over operations in January 2017.

Andrew Bonfield, chief financial officer, received a 0.9% increase in salary to $832,000 in salary and total compensation of $4.58 million, down 24.2%.

Denise Johnson, a group president, received a 1.4% raise to $820,500 in salary and total compensation of $4.74 million, down 24.5%.

Bob De Lange, a group president, received a 0.7% raise in salary to $767,400 and total compensation of $4.68 million, down 13.8%.

William Ainsworth, a group president, received a 1.9% decrease in salary to $740,100 and total compensation of $4.74 million, down 13.5%.

There are four shareholder proposals on the agenda for the virtual shareholder meeting on June 9. The board of directors has recommended voting against all four.

They are: require additional disclosures of Caterpillar’s climate activities and policies; require an annual board report on the company’s workforce diversity and inclusion status; amend its incorporation certificate to become a public benefit corporation that would give employees and customers more influence over key fiduciary decisions; and allow for shareholders to take action without a planned meeting if a specified number of shareholders consent to the action in writing.




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