It was a tough year for Bell Atlantic Corp. Chairman Raymond W. Smith in 1994. First his $30 billion merger deal with Telecommunications Inc. falls apart. Then he takes an 18 percent pay cut, to a lousy $2 million.
At least he can console himself with the 948,180 stock options he received.
The Philadelphia-based telephone company's recently filed proxy statement shows that Mr. Smith received a modest 4.1 percent raise in May -- an amount that was in line with the company's budgeted 4 percent merit pay increase pool. Because the raise did not come at the beginning of the calendar year, his salary for 1994 actually rose just 2.6 percent, from $809,900 to $831,200.
That raise was more than offset by decreases in Mr. Smith's bonuses under the company's Short Term Incentive Plan (STIP) and Performance Share Plan. His 1994 STIP award, which could have reached a maximum of $1 million, was $778,700. In 1993, he received a $880,700 award.
Mr. Smith's 1994 bonus under the Performance Share Plan could have gone as high as 47,920 shares, but the board favored him with only 8,008 shares, worth $400,900. The award, based on the performance of the company's stock over the 1991-1994 period, was 47.3 percent lower than the $761,400 he received the previous year for Bell Atlantic's 1991-1993 price gain.
Bell Atlantic spokeswoman Cynthia Ciangio said the pay drop was no reflection on the board's confidence in Mr. Smith, but was more the result of a 16 percent decline in the company's stock price last year.
"We very much believe in seeing that a large portion of our top managers' pay is performance-based," she said.
Mr. Smith's drop in compensation, from 1993's $2.45 million, was cushioned by his stock option grant, which essentially gives him the right to buy shares at its 1995 price in future years.