P&G CEO's Pay Shrunk 6.1% in FY12 - Analyst Blog

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In a regulatory filing, Procter & Gamble Company ( PG ) announced that the pay of its chief executive officer (CEO) shrunk by 6.1% as the retail giant's performance in fiscal 2012 ended in June 2012 was below expectations.

CEO Robert McDonald received a compensation of $15.2 million in fiscal 2012, lower than $16.2 million earned last year. The compensation comprised salary, bonus, stock and options. While salary of the CEO remained stable for the past three years; the bonus, stock and options declined as a larger part of his pay was tied to the company's performance.

Back in late June, the consumer goods giant had lowered its sales and earnings outlook for the final quarter of fiscal 2012, marking the second successive cut in the company's guidance in the last three months. The guidance cut resulted from a slowing global economy, sluggish market share growth in the developed countries and China, and foreign exchange headwinds. The final results announced in early August were almost in line with the lowered guidance.

Fourth quarter revenues declined 1%, largely due to foreign exchange headwinds. Further, P&G witnessed sluggish growth in the developed nations, principally in North America and Western Europe, due to weak economic conditions and market share declines. Earnings were flat with the prior-year levels, as benefits from pricing and cost savings from restructuring activities were offset by top-line shortfall and rising commodity costs.

P&G, which is known for its impressive product development capabilities, has also failed to launch a break-through new brand or create a new product category for quite some time now. P&G plans to redress the situation by focusing once again on innovation.

P&G carries a Zacks #3 Rank, which translates into a short-term hold rating.


 
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