Published: April 14, 2009 11:28 am      

AK Steel CEO gets pay package worth $9.5 million

HARTFORD, Conn. — AK Steel Holding Corp. paid Chief Executive James L. Wainscott $9.5 million in 2008, up 3 percent from 2007, according to an Associated Press analysis of its proxy filings.

Wainscott, 52, who also holds the titles of chairman and president, received compensation valued at $9.2 million in 2007.

Last year, Wainscott was paid a $1.1 million salary, up 5 percent from 2007, and a performance-based bonus of $4.5 million, up nearly 15 percent, according to a filing Tuesday with the Securities and Exchange Commission.

He received $161,965 in other compensation, which was 39 percent higher than in the prior year, and included use of a plane and company contributions to his retirement plans.

The bulk of Wainscott's compensation was $3.8 million in restricted stock and options, of which $663,840 in options were granted at an exercise price of $36.59 per share. AK Steel's stock now trades at $10.80, meaning the options curre ntly have little value.

The Associated Press calculated Wainscott's pay according to a formula that's designed to isolate the value the company's board placed on his total compensation package during the last fiscal year. The AP formula includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

Last year, AK Steel earned $4 million, or 4 cents per share, down from $387.7 million, or $3.46 per share, in 2007. Excluding fourth-quarter charges, it reported pretax income of $692.6 million for 2008.

Revenue rose to $7.64 billion in 2008, from $7 billion a year earlier.

AK Steel and other steel ma nufacturers are struggling as demand slows for everything from washing machines to SUVs. Steel makers shut plants and laid off thousands of workers.

However, AK Steel said Wainscott performed well in the years before the start of the recession and was rewarded accordingly.

"Indeed, until the dramatic downturn in the economy, the company was well on its way in 2008 to its best-ever annual financial performance," the West Chester, Ohio, company said. "Unfortunately, that economic downturn had a severe negative impact on the company's business in the fourth quarter and likewise hurt the company's full-year results."

The compensation reflects "outstanding performance" in 2008 and preceding years, the company said.

"It was during those years that the management team laid the foundation for the company's outstanding performance in 2008 in the face of such extraordinarily challenging business conditions," it said.

The performance-based bonus for Wainsc ott, who has been president, chairman and CEO since 2006, was based on his work judged by criteria established in early 2008, AK Steel said.

However, as a result of the continuing economic weakness, AK Steel cut the base salary of several executives by 5 percent this year, it said. And the value of the equity component of each executive's compensation package awarded in January is down by about 25 percent compared with its value in January 2008, the company said

opyright 2009 The Associated Press.