Campbell ties executive pay to defeating rivals

CAMPBELL SOUP has introduced a new executive remuneration plan that ties the pay of senior officers to the company's performance compared with that of its rivals, putting as much as 75 per cent of their earnings at risk.

An executive's base pay would not be affected by Campbell's financial performance year-to-year. But his or her bonus could be zero if the company under- performed relative to its food-industry peers.

On the other hand, the value of annual bonuses accelerates quickly if the company's performance exceeds the industry median and internal earnings targets set by a committee of outside Campbell directors.

The plan also requires executives to receive about half of their long-term remuneration in the form of restricted Campbell shares and market-priced share options, in effect linking their personal fortunes to those of the company.

The chief executive, David Johnson, for example, received a base salary of dollars 806,700 for the 1993 fiscal year, and a bonus of dollars 912,722 - somewhat less than the previous year, because Campbell's performance surpassed its goals by a narrower margin than in 1992. And as part of that package, he received 100,000 restricted shares, which can be redeemed only if he remains at Campbell until the end of 1997.

Other measures enacted at Campbell include having only one company executive on the board, annual re-election of directors and the elimination of anti- takeover provisions.

In August, the firm announced that its dollars 1bn employee pension plan would encourage similar corporate-governance principles at companies included in its portfolio.

Shareholder-rights advocates welcomed the announcement.