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Sara Lee’s Gold-Plated Star

As footnoted regulars know, occasionally Michelle bestows the coveted footnoted gold star to companies whose executives set the bar high for good corporate behavior.

When we read the proxy that the Sara Lee Corporation (SLE) filed on Wednesday, it seemed worthy of an approving nod. Although for reasons we’ll explain, while this can’t be an 18-karat gold star, it falls somewhere between gold-plated and 10-karats.

On page 31 of the proxy, the company states that “Sara Lee has terminated all use of its corporate aircraft, and the company-provided executive car program in the U.S. has been replaced with a less expensive car allowance beginning in fiscal 2010.” The filing also notes that while executives were allowed to use the corporate plane for personal purposes last year so long as they reimbursed the company, there was no personal use of the aircraft in fiscal 2009.

It’s nice when we come across a company that is taking steps to trim executives’ perks rather than to further sweeten the perk pot.

But that isn’t to say that shareholders might not have a quibble with some of the executive compensation decisions at Sara Lee. For example, the Summary Compensation Table discloses that Chairman and CEO Brenda Barnes’s total compensation soared from $9.3 million in 2008 to $15.2 million in 2009. While her salary increase accounted for $125,000 of that, the main jump was in stock awards. In 2008, Ms. Barnes received stock awards worth $3.36 million; but in 2009, she got stock awards worth $8.29 million.

As this article notes, Sara Lee’s performance had some mixed results in the fourth quarter and for fiscal year 2009. When the results were released in mid-August, Ms. Barnes stated that the company had made great strides in “efficiencies and productivity across the board,” yet the results were hampered because of a decline in net sales and the impact from unfavorable foreign currency exchange rates.

Thus, in light of those mixed results, no one can blame the shareholders if they ask a question or two about the generous stock grants at the company’s upcoming annual meeting on Oct. 29.

But still, kudos to the company on using some restraint with respect to the perks. And, to dust off and paraphrase the company’s motto from long ago, “Nobody doesn’t like receiving Footnoted’s gold star.”

Image source: Sara Lee