March 15 (Bloomberg) -- ABB Ltd. awarded Chief Executive Officer Joe Hogan a total pay package of 10.2 million Swiss francs ($10.8 million) in 2012, about 8 percent more than the previous year and eclipsing the compensation of Siemens AG chief Peter Loescher.
Hogan’s remuneration is made up of about 2 million francs in base salary, 3.3 million francs in variable compensation to be paid in 2013, 4.1 million francs in share-based awards from a long-term incentive plan which will pay out in 2015 if specific performance targets are reached, pension contributions, and benefits including social security and children’s education, Zurich-based ABB said in its annual report.
Hogan overtook Loescher, who’s total pay package was 7.9 million euros ($10.2 million) in 2012, 867,000 euros less than the year before. ABB shares gained 6.1 percent last year, while rival Siemens’ shares rose 11 percent. Hogan earned more than twice as much as ABB’s second highest paid executive, Bernhard Jucker who was paid 4.6 million francs in total.
CEO salaries face increased scrutiny in Switzerland after the people there voted on March 3 for greater shareholder powers to decide executive pay. The new laws will ban severance payments and bonuses for acquisitions or divestments, with jail terms of up to three years for executives who don’t follow the rules.
ABB said total executive committee member compensation rose to 50.9 million francs from 37.8 million francs in 2011, reflecting an extra member, increased long-term incentive payments, and 8.4 million francs from a new executive compensation plan for meeting targets for integrating the acquisitions of Baldor Electric Co., Thomas & Betts Corp. and Ventyx Inc., introduced in the fourth quarter of 2012.
ABB spokesman Antonio Ligi said the acquisition integration payments are not touched by the new compensation rules.
Shares of ABB traded 0.5 percent higher at 21.81 francs as of 12:53 p.m. in Zurich. About 7.3 million shares changed hands, or 124 percent of the three month average.
To contact the reporter on this story: Patrick Winters in Zurich at email@example.com
To contact the editor responsible for this story: Simon Thiel at firstname.lastname@example.org