By Bob Tita
Deere & Co. Chief Executive Sam Allen asked the company's
board to cut his cash bonus for 2014 by 25% in the wake of tough
conditions in the farm equipment market and the company's flagging
stock price, Deere said in regulatory filing Friday.
The Moline, Ill., company said the board honored Mr. Allen's
request, "resulting in total payments .... of $1.8 million less
than the amounts he would have otherwise earned" for meeting the
company's performance goals.
Mr. Allen's total compensation for the company's fiscal year
ended Oct. 31 rose 5.9% from last year to $20.3 million. Much of
the increase stemmed from a change in the value of his pension and
deferred compensation, which rose to $3.14 million from $1.19
million in 2013. Excluding the pension, Mr. Allen's compensation,
which also includes awards of stock and options, fell 4.6% to $17.1
million.
His base salary rose 4.1% to $1.49 million, but his
incentive-based bonus slipped 19.5% from 2013 to $5.39 million.
Without the voluntary reduction, his Mr. Allen's bonus would have
climbed 7.3% to $7.19 million.
Falling crop prices and the curtailment of generous U.S. tax
deductions for farmers investing in new machinery have damped
demand for farm machinery, particularly for large, high-horsepower
models in the U.S. and Canada where Deere dominates the market.
Deere, the world's sales leader in farm tractors and harvesting
combines, reported a 9% decrease in farm machinery sales in fiscal
2014 to $26.4 billion, while operating profit from farm equipment
dropped 22% to $3.65 million. Overall net income for the year
slipped 10.6% to $3.16 billion, or $8.63 a share, from $3.54
billion, or $9.09 a share in 2013.
For fiscal 2015, Deere forecast profit at $1.9 billion, implying
earnings per share of $5.35 to $5.50.
Since the start of the year, Deere stock has slipped 1.1%, while
the broader market S&P 500 index is up 11.5%. Deere shares
Friday closed 0.58% higher at $90.06.
Write to Bob Tita at robert.tita@wsj.com
Access Investor Kit for Deere & Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2441991054
Subscribe to WSJ: http://online.wsj.com?mod=djnwires