People of Faith CT

Chenevert Earns $5.9 Million In First Year As United Technologies CEO
By ERIC GERSHON
The Hartford Courant
February 20, 2009

Louis R. Chenevert earned $5.9 million in total compensation in his first year as chief executive of United Technologies Corp., a year when the company lost 30 percent of its stock value and cut thousands of jobs, yet generated sizable profits despite the recession.

George David, who stepped down as CEO when Chenevert took over last April, earned $23.9 million from UTC last year, most of it by exercising stock options, according to the company's proxy statement, filed Friday with federal securities regulators.

The 30 percent decline of UTC's stock price in 2008 was less than that of the Standard & Poor's 500 Industrials Index, which fell 42 percent. The company raised its shareholder dividend by more than 20 percent.

Hartford-based UTC earned healthy profits in 2008 -- $4.7 billion, up 11 percent -- partly by lowering costs through 5,500 job cuts worldwide.

Chenevert, 51, received a salary of $1.3 million, a bonus of $3 million, direct incentive pay of $1.3 million and other compensation totaling $266,726, mostly personal use of corporate jets and insurance premiums. Until April 9, Chenevert was UTC president.

Chenevert did not exercise any options in 2008, according to the proxy. But he was awarded new stock grants and option-equivalents valued at $10.5 million. They have not yet vested.

David, 66, received a salary of $1.26 million, a bonus of $2 million, direct incentive pay of $4.46 million and other compensation of $705,699, almost half of which was personal use of the company's aircraft. David is executive chairman of UTC's board of directors and remains an employee of the company.

David also realized $15.4 million from the exercise of stock options in 2008. He received new, unvested stock grants and option equivalents valued at more than $12 million.

Chenevert's bonus rose 50 percent from 2007; David's fell 50 percent.

In 2007, David's total compensation came to $65 million, including stock options exercises.

The Courant's calculation of total compensation includes salary, bonus, direct incentive compensation, other compensation and value realized from the exercise of stock options.

Using a formula required by federal securities regulators, UTC reported considerably higher total 2008 pay for Chenevert -- $18,009,832. The formula counts as income the value of new, unvested stock and option awards.

After David and Chenevert, UTC's top-paid officials were Stephen Finger, who last month retired as president of Pratt & Whitney, whose pay came to $5.9 million; Ari Bousbib, the president of UTC's commercial companies, whose pay came to $5 million; and Geraud Darnis, president of Carrier Corp., whose pay came to $3.8 million.

Shares of UTC fell 1.6 percent Friday, closing at $43.99.

The company's 2009 annual shareholder meeting is scheduled for April 8 at a Pratt & Whitney facility in Jupiter, Florida.