Soft Landing for Alcoa’s CEO

July 30, 2009

When Alain J. P. Belda, Alcoa’s (AA) Chairman of the Board of Directors and former CEO, retires on Saturday as an executive officer, he will leave after spending 40 years with the company – certainly an anomaly by modern standards. But he’s not exactly saying “goodbye,” and he’s going to get a very, very soft landing when he finally cleans out his desk.

In the 8-K that Alcoa filed yesterday, the company spelled out the terms for Belda’s transition. First, he’ll continue to serve as Chairman of the Board of Directors until his term expires on April 23, 2010. But because he will no longer be an executive, it’s doubtful that the full extent of Belda’s exit package will ever really see the light of day. Still, there are some hints in yesterday’s filing.

From the 8-K, we know that “Mr. Belda’s target incentive compensation for 2009 as an executive officer payable after year-end will be equal to 150% of his base salary, pro-rated through August 1, 2009 and adjusted by the corporate performance score determined by the Compensation and Benefits Committee of the Board of Directors at year-end.” It’s anyone’s guess as to what that “corporate performance score” is going to be since it’s tied to a number that will be determined at the end of the year. But some digging through the company’s March, 2009 proxy told us that Belda’s 2008 base salary was $1,457,500. Thus, that could be a bit under $1.3 million.

Starting August 1, 2009, Belda will earn an annual retainer of $192,500 for serving as a non-employee director; the company says that sum will be “prorated for length of service” but – once again – does not spell out what adjustment, if any, will be made. Belda will get another $140,000 “for his use in meeting his expenses for office space and support, for up to five years;” Alcoa will pay his universal life insurance policy premiums until Dec. 2019; and it will make a matching contribution to Belda’s tax-exempt foundation in the sum of $2.5 million, to be paid over 10 years.

In 2008, Belda earned a total comp package of more than $13.5 million, so it’s clear that he’s taking a big cut. But it’s equally clear that he’s getting a nice, soft landing and one that will not be all that visible to Alcoa shareholders. Then again, perhaps that’s the reward for sticking around for 40 years.

Image source: Getty Images


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