Executive Compensation Concerns at Eastman Kodak Corporation

The Corporate Library has increased concerns related to executive compensation policies at Eastman Kodak Corporation. As an example, CEO Antonio M. Perez’s change in pension value and deferred compensation earnings in 2009 was nearly $2.5 million, more than double his base salary and more than the combined 2009 base salaries of the five other Eastman Kodak named executive officers. In addition, Mr. Perez amended (for the fourth time) his initial employment agreement and received an ad hoc award of 500,000 stock options at a low exercise price of $4.54 in October 2009 for “retention purposes.” In addition, the company accelerated its 2010 long-term equity grant of restricted stock units (RSUs) and issued them in the fourth quarter of 2009. The company claims this was also done for “retention” purposes, but one might wonder whether it was to take advantage of Eastman Kodak’s historically low share price. Also, 25% of long-term equity grants are in the form of Leadership Stock that is based on only one-year performance periods—chosen “due to the difficulty of setting multi-year goals in the uncertain economic environment”—and an additional two-year vesting period. Finally, we note personal use of corporate aircraft benefits and numerous discretionary elements and bonuses.

More information is available in Eastman Kodak's corporate governance report, including the company governance rating.

Damion Rallis – Ratings Analyst

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