The Wall Street Journal-20080116-Deere CEO Harvests Demand- Total Compensation Of --36-1 Million a Week Has Farming Roots
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Deere CEO Harvests Demand; Total Compensation Of $1 Million a Week Has Farming Roots
Deere & Co. Chief Executive Robert Lane reaped about a million dollars a week in total short- and long-term compensation last year as the agricultural-machinery giant he oversees prospered amid a world- wide farm-commodity boom.
Mr. Lane's $52.4 million compensation, reported in a regulatory filing, included $31.9 million from the exercise of stock options during the fiscal year ended Oct. 31 and total compensation valued at $20.5 million for the fiscal year.
Mr. Lane's rising fortune comes as Deere has been able to latch on to soaring global demand for meat, grains and biofuels, which has pumped money into farmers' pockets in big farming regions such as the Midwestern U.S., Brazil and Central Europe. Those farmers, in turn, are buying more high-powered tractors and combines. Farm-machinery makers sold more larger tractors in North America in 2007 than any time since 1991, according to Association of Equipment Manufacturers data, said Ann Duignan, a Bear Stearns research analyst, in a recent report. Bear Stearns has done business with Deere in the last year.
Deere, of Moline, Ill., has streamlined its manufacturing processes to produce in line with demand and harnessed the farm boom to boost its profitability more than threefold since 2000, when Mr. Lane took over the top post. In a recent earnings report, Deere forecast net income of $2.1 billion for the current fiscal year, its highest ever.
Deere's stock has soared. Late last year, the stock split 2 for 1. Yesterday in 4 p.m. composite trading on the New York Stock Exchange, Deere shares were off $2.33 to $92.36.
Mr. Lane's $20.5 million total compensation includes a salary of about $1.3 million, stock awards valued at a just more than $5 million and option awards valued at about $4 million, according to the filing. Included is $381,000, mostly for Mr. Lane's personal use of company planes. Compensation based on the firm's incentive plan, including cash awards, reached $6.4 million.
At the end of its fiscal 2007, Deere forecast that equipment sales would rise about 12% this year, with agricultural sales increasing 17%. The U.S. housing slump likely will continue to restrain construction and forestry-equipment sales.
