The post-belt-tightening days at Parker Hannifin…

September 29, 2010

Oh, what a difference 18 months can make.

In March, 2009, articles such as this one in Workforce Management reported some pretty intense belt-tightening at Parker Hannifin (PH), the Cleveland, Ohio-based company that produces motion and control systems for use in the aerospace, industrial, and mobile industries. After laying off 9,000 employees, the company announced that it had reduced executive salaries by 10 percent. What’s more, Parker Hannifin spokesman said at the time to Workforce Managment (the source of the above-referenced article), if one also considers incentive compensation, “…some executives’ total compensation could be down by as much as 60 percent” that year.

But now, based on the DEF 14A (proxy) that Parker Hannifin filed September 27, we can report that the belt-tightening is over – at least as far as executives’ salaries are concerned.

Chairman of the Board, President, and CEO Donald Washkewicz saw his total compensation jump more than 37 percent, from $12.56 million in fiscal 2009 to more than $17.31 million in fiscal 2010. While Washkewicz’s base salary actually fell $19,250 from the amount he got the prior year, and his “Other” compensation dropped nearly $58,000 (for life insurance premiums, defined contribution plan payments, and perks such as a leased car, an executive physical, and prime tickets to various entertainment performances), other forms of compensation rose by millions. That included his stock awards (more than $5.98 million), option awards (more than $5.91 million), and non-equity incentive plan compensation (nearly $2.2 million).

The upward trend also applied to CFO/EVP – Finance and Administration Timothy Pistell, EVP/Operating Officer Lee Banks, and EVP – Sales, Marketing and Operations Support Marwan M. Kashkoush. Meanwhile, Thomas L. Williams, also named as an EVP/Operating Officer – who appears for the first time as one of the Named Executive Officers listed in the Summary Compensation Table on page 46 – pulled in a total compensation package worth more than $3.9 million.

Consequently, we’ve decided that it won’t be necessary for the footnoted team to organize a bake sale for the benefit of Parker Hannifin’s top executives. We’re less sure about whether the answer is the same for the 9,000 employees who were laid off last year.

Image source: Parker Hannifin

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