Kraft Foods CEO got compensation of $16 million in 2008

The chief executive of Kraft Foods Inc., maker of brands like Oreo and Nabisco, received compensation worth $16 million in 2008, an increase of 38 percent from the prior year, according to Associated Press calculations of data filed with regulators Tuesday.

Irene Rosenfeld, 55, received a base salary of about $1.5 million in 2008, an increase of 5.6 percent from the previous year, according to the company's report filed with the Securities and Exchange Commission. The bulk of her compensation came in an increase in stock options and restricted stock, much of which has lost value as the company's stock has declined in recent months.

According to the filings, the Northfield-based company's board of directors approved raising Rosenfeld's salary in 2008 to bring it in line with other, similar companies. But the food maker said it would not raise the base salary for Rosenfeld, or any other executive, in fiscal 2009.

Rosenfeld received a performance-based bonus of nearly $4.1 million last year, a 55 percent increase from the $2.6 million she received the prior year. The company said in its filings that she was awarded the bonus for achieving key financial targets, meeting guidance and analyst expectations and providing new product offerings that focused on growth categories with fewer, but larger, product launches.

Rosenfeld's other compensation, which includes perquisites, fell more than 60 percent from the previous year, to $153,868. The figure includes $20,858 for personal use of the company's aircraft, car expenses worth more than $14,000 and relocation expenses worth nearly $40,000.

The bulk of Rosenfeld's pay came in an increase in stock options and restricted stock. She was awarded options and stock worth about $10.3 million on the day they were granted, 43 percent above the $7.2 million she received in stock options and restricted stock the prior year. But the 2008 figure includes nearly $2.4 million in options that have since lost value, given that the options exercise price of $29.485 is above Monday's closing price of $21.84.

The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.

Rosenfeld took over the top job in 2006, after leaving as chief executive of Frito-Lay, the snack division of PepsiCo Inc. She had previously worked for Kraft Foods for more than 20 years in various capacities.

The company, the nation's largest food maker, is in the midst of a three-year turnaround as it sees more customers for its products as consumers look to save on food costs and eat at home, rather than in restaurants.

But the maker of brands such as Velveeta, Planters snack nuts and Maxwell House has been dealing with high ingredient costs that have been weighing down business. Food makers have been raising prices to compensate for the ingredient costs that reached record highs last summer. But now consumers, looking to save even more money, are trading down to private label, off-brand products. In the company's fourth quarter, which ended in December, sales volume fell 5.2 percent, both as the company cut unprofitable product lines and retailers and consumers pulled back on their spending.

For fiscal 2008, Kraft's profit rose 12 percent to $2.9 billion, or $1.92 per share, from $2.59 billion, or $1.62 per share. Revenue rose 17 percent to $42.2 billion from $36.13 billion a year ago.

In February, the company cut its 2009 guidance because of the stronger dollar and pension costs. As the U.S. dollar gains strength, that hurts companies doing business overseas.

The company set its annual shareholder meeting for May 20 in Skokie.