Northeast Utilities chief executive Thomas J. May last year received an increase in salary, stock awards, and cash incentives, but his overall compensation declined from 2012 because of how public companies account for the value of executive pensions.
Under federal rules, companies must report the changes in pension value each year as part of executive compensation. Last year, the value of May’s pension didn’t change after appreciating $1.2 million in 2012. As a result, May’s reported compensation decreased nearly four percent in 2013 to $7.7 million from nearly $8 million in 2012, according to a regulatory filing.
May’s compensation became an issue last year when Northeast Utilities filed an annual report for 2012 that included only nine months of pay for May. It excluded his earnings for the three months he served that year as chief executive of NStar — before the Boston utility completed its $17.5 billion merger with Northeast Utilities and May became chief executive of the combined company.
Under Securities and Exchange Commission rules, the utility had no obligation to disclose how much May was paid at NStar since it no longer existed as an independent company. Under pressure from Massachusetts Attorney General Martha Coakley, Northeast Utilities later reported the missing pay details.
Earlier this week, Northeast Utilities filed its 2013 annual report, disclosing May’s pay for the company’s first full year of operations since the merger.
May earned about $900,000, or nearly 14 percent, more in salary, stock, and cash bonus last year than in 2012. His salary rose about 3 percent to $1.16 million, his stock awards nearly 25 percent to roughly $4.3 million, and his cash performance bonus about 1.2 percent to nearly $2.13 million.
Northeast Utilities also reported that the value of May’s “other compensation” rose 21 percent to about $111,000. Other compensation included perks such as nearly $61,000 attributable to a previously granted life insurance benefit, $6,720 in financial planning services, roughly $7,000 for company-leased vehicles, and nearly $26,500 for a home security system.
Just how much May actually took home last year, however, is hard to calculate. That’s because compensation figures reported by public companies include pension contributions and stock awards that are only realized as income in future years.
May’s compensation is competitive with earnings of chief executives running other utilities and judged on performance, Northeast Utilities spokeswoman Caroline Pretyman said Thursday.
“Tom May has a long history of leading a very successful company for our customers, employees, and shareholders,” she said in an e-mail. “Under Tom’s leadership in 2013, we achieved significant cost reductions thanks to a successful integration, while maintaining strong operating performance.”
Northeast Utilities stock closed Thursday at $44.03 a share, up nearly 23 percent from $35.91 a share when the company’s merger with NStar was finalized in 2012.