Caterpillar Inc. (NYSE:CAT), the largest manufacturer of construction and mining equipment, disclosed in its regulatory filing with the Securities and Exchange Commission (SEC) that the total compensation of its chairman and CEO Doug Oberhelman declined by 33% last year.
Last year, Oberhelman’s total compensation declined to $14.99 million from $22.37 million in 2012. The main reason for the decline was a drop in his option awards and incentive-payment plans as the company failed to meet its performance target.
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Last year, Caterpillar Inc. (NYSE:CAT) reported $3.79 billion profit; down by 33%. Its profit was negatively affected by the decision of mining companies to cut their expenses on equipment. Its sales dropped 16% to $55.66 billion. Its earnings per share were $5.75 – significantly lower than its EPS guidance in the range of $7 to $9.
Other employees receive smaller payout
Last summer, Caterpillar Inc. (NYSE:CAT) also informed workers that its short-term incentive plan—the core of its profit sharing program (approximately 60,000 participants) will distribute the smallest payout since the recession. Based in the company’s quarterly disclosures to investors, the disbursements related to the program declined by around 40%.
Cost cutting initiatives
The world’s largest construction and equipment manufacturer vowed to reduce its expenses to deal with the continuing decline in orders for mining equipment. Caterpillar Inc. (NYSE:CAT) was on a “cost-lockdown binge,” said Oberhelman last October.
Over the past year, Caterpillar Inc. (NYSE:CAT) announced its plans to shut down or already closed its plants in Pulaski, Va.; Beckley, W.Va.; Kilgore, Texas; Summerville, S.C., and Owatonna, Minn. The company also closed its plant near Toronto and Sudbury, Canada.
Early in 2013, the company announced its decision to cut 1,400 jobs at its plant in Gosselies, Belgium. Most recently, Caterpillar Inc. (NYSE:CAT) announced its intention to close its plant that manufactures road paving equipment such as compactors, planers and pavers in Rantigny, France.
Caterpillar maintains quarterly dividend
Earlier this month, the board of directors of Caterpillar Inc. (NYSE:CAT) voted in favor of maintaining its quarterly dividend of $0.60 per share of its common stock.
In a statement, Oberhelman said, “Our priorities for uses of cash and our commitment to deliver superior returns to stockholders through the cycles remain unchanged. This dividend, along with the largest quarterly stock repurchase of $1.7 billion completed in March, demonstrates this commitment.”
Caterpillar Inc. (NYSE:CAT) is scheduled to report its financial results for the first quarter on Thursday, April 24th around 6:30 AM Central Time.