UPDATE 1-Kraft CEO's compensation rose to $17 mln in 2008

* CEO compensation package value up 50 pct

* No bonus paid, but stock awards rise

* Revenue exceeds goal, operating income misses

CHICAGO, March 31 (Reuters) - Kraft Foods Inc KFT.N CEO Irene Rosenfeld's compensation package rose about 50 percent to $17 million last year, due in large part to increased stock, stock options and annual incentive awards.

Rosenfeld's salary was about $1.5 million in 2008, up from $1.4 million the prior year, the largest North American food company said in its annual proxy statement filed with the Securities and Exchange Commission.

Rosenfeld said last month that Kraft would freeze top executive salaries in 2009. [ID:nN10314484]

Rosenfeld and other top officers did not receive a bonus in 2008.

Still, other compensation rose. Rosenfeld received stock awards of about $7.3 million, up from $4.6 million a year earlier, and options valued at $1.3 million, up from $395,933 a year ago. Annual incentive awards rose to $4.1 million from $2.6 million.

Kraft's total shareholder return exceeded the company's peer group and other benchmarks, though the company noted that 2008 was a "difficult year for Kraft Foods shareholders."

Kraft shares fell 17 percent in 2008, while the Standard & Poor's 500 .SPX index fell 38.5 percent.

The company said its organic revenue -- a measure that excludes the impact of currency fluctuations -- acquisitions and divestitures, rose 6.6 percent, exceeding its goal of 4.2 percent.

However ongoing operating income, on a constant currency basis, rose only 12.2 percent, below Kraft's target of 17.3 percent. That shortfall was largely due to the impact of losses on certain commodity hedging positions, the company said.

Kraft's discretionary cash flow -- cash flow from operations minus capital expenditures, was $2.77 billion, well above its $2.28 billion goal.

Kraft said it would hold its annual meeting on May 20.

Its shares rose 16 cents to $22 in morning trading. (Reporting by Brad Dorfman, editing by Maureen Bavdek)