NEW YORK (AP) — The CEO of beauty products seller Avon Products Inc. received a compensation package valued at $12.9 million during her first year on the job.
Sheri McCoy, 54, who became CEO in April 2012, received a base salary of $831,781, according to a filing with the Securities and Exchange Commission on Friday.
She received a bonus of about $1.9 million and stock awards worth nearly $9.4 million on the date they were granted. She also received a performance-based bonus of $591,025 and other compensation of $180,139. The other compensation includes perks such as financial planning and tax preparation, a car service allowance, an executive health exam, temporary housing costs and related expenses and legal fees related to her hire.
Andrea Jung, who was Avon CEO through April 2012 and executive chairman through the end of the year, received a pay package valued at $6.4 million, the same as in 2011. She received a base salary of $1.1 million and stock awards valued at $5.1 million when they were granted. She received $209, 134 in other compensation, including perks such as financial planning and tax preparation, a car lease, insurance, home security, an executive health exam, monthly parking, and a car service allowance of $96,404.
In the filing with the Securities and Exchange Commission, Avon said 2012 was "a challenging year for Avon and one of significant transition."
Avon, a direct seller of beauty products including Skin So Soft lotion and mark cosmetics, has been struggling to turnaround results at home and in emerging markets. In addition its dealing with a long-running bribery probe in China that began in 2008 and has since spread to other countries.
The company added that even though 2012 results were "disappointing," McCoy has established a clear turnaround strategy, aimed at achieving mid-single digit percentage revenue growth and $400 million in cost savings by 2016.
In its most recent quarter, Avon posted a wider fourth-quarter loss as it marked down the value of its Silpada jewelry business and paid restructuring costs. Results beat analyst expectations and McCoy said there were signs of stabilizing the business.
For all of 2012 Avon posted a loss of $42.5 million, or 10 cents per share, compared with profit of $513.6 million, or $1.18 per share, in 2011. Revenue fell 5 percent to $10.7 billion from $11.3 billion.
Shares fell 18 percent in 2012. They have rebounded this year, up 41 percent since the first of the year to close Tuesday at $20.26.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2012 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.