Abbott Laboratories

Proxy released 3/13/2015

The total disclosed compensation for Abbott’s CEO Miles White is down from the prior year. The value of stock awards and option awards are both significantly lower, while salary has remained the same and non-executive incentive pay was reduced, and total disclosed pay was reported as of $17,732, 241.

The Abbot proxy, however, is an example of why the summary compensation is not the only table worthy of focus. In the 2014 Options Exercised and Stock Vested column, one can see that t White realized nearly $9 million on the exercise of Abbot stock, and $15 million in the exercise of AbbVie stock. In addition, he realized $7.78 million through shares acquired on the vesting of Abbott RSUs, and $6.4 million of shares acquired on the vesting of AbbVie stock. These figures total over $36 million dollars, more than twice the pay reported in the summary compensation table.

It has become the fashion at some companies to disclose “realized pay” when stock price declines or other performance issues result in lower than expected payments in equity. One rarely sees the reverse: while it is much more common for executives to reap windfalls, these tend not to be highlighted by the company.

Another proxy table shows that White holds several million additional options. These include 438,000 options each for both Abbott and Abbvie that expire in February 2016 and have a strike price of $21.21, less than half of Abbott’s current stock price. Shareholders should continue to monitor these when evaluating pay at Abbott.