Caterpillar Inc (CAT.N) Chairman and Chief Executive Officer Doug Oberhelman's compensation declined 33 percent last year because of the company's failure to meet promised profit and performance targets, according to a filing on Monday with the U.S. Securities and Exchange Commission.
Oberhelman still took home nearly $15 million in total compensation in 2013, according to the SEC filing, more than half of it in the form of stock options awards.
Oberhelman was hardly the only employee at Caterpillar to take a pay cut in 2013, and like a lot of workers with the company, he knew it was coming.
Last summer, the world's largest maker of earth-moving equipment put workers on notice that its short-term incentive plan, the centerpiece of its performance-based, profit-sharing program, would make its smallest payout since the recession.
In updates to the plan's roughly 60,000 participants, and in quarterly disclosures to investors, Caterpillar said it expected 2013 outlays related to the program to be down as much as 40 percent from 2012, reflecting sharply reduced payments to employees.
The reason: Cancellations from mining customers weighed on high-margin sales to that key sector, forcing the Peoria, Illinois-based company to cut its full-year earnings forecast several quarters in a row and to implement major cost cuts.
In the end, Caterpillar's earnings per share fell 32 percent in 2013 to $5.75. While that was way below the $7 to $9 EPS range it initially forecast, it was still one of the company's best year's ever.