Proxies Reveal CFOs’ ”Option Play”

Occidental Petroleum; Adobe Systems; Lexmark; Anheuser-Busch; McGraw-Hill; Aetna.

Gains from exercising previously awarded options played a dominant role in the 2004 compensation for a number of chief financial officers, according to their companies’ recently filed proxy statements.

For example, last year Occidental Petroleum senior executive vice president and CFO Stephen I. Chazen netted more than $14.8 million from exercising options alone. He also received a salary of $654,000, a bonus of $1.15 million, and restricted stock worth more than $5.1 million. His total package for 2004 worked out to $21.8 million.

Adobe Systems senior vice president and CFO Murray J. Demo earned more than $9.3 million from exercising options. He also took home a salary of $449,000 and a bonus of $471,000.

Lexmark executive vice president and CFO Gary E. Morin netted about $8.7 million from exercising options; his salary and bonus totaled $885,000.

Anheuser-Busch vice president and CFO W. Randolph Baker took home more than $3.6 million; more than $2.4 million of that total represented his net proceeds from exercising options.

McGraw-Hill executive vice president and CFO Robert J. Bahash earned more than $6.2 million from exercising options, as well as a salary of $742,000 and a bonus of $945,000. He also enjoyed long-term incentive payouts of more than $884,000, more than double the prior year’s total. Altogether, Bahash earned a little less than $9 million.

Aetna CFO Alan M. Bennett earned about $2.4 million from exercising options, more than double the $1 million or so that represented his combined salary and bonus.

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