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July 1, 2013

Berkley leads CT executive pay list

W.R. Berkley Corp. CEO William R. Berkley saw his total compensation package more than double in 2012, catapulting him atop the Hartford Business Journal’s list of the top 25 highest paid executives in Connecticut.

Berkley, who also chairs the Greenwich insurance company’s board of directors, took home a total pay package of $31.3 million in 2012. That was up from the $15.2 million he earned in 2011, according to an HBJ analysis of U.S. Securities and Exchange Commission filings.

The significant pay increase was largely a result of the $9.3 million in stock awards Berkley was awarded.

Meanwhile, Berkley’s son, W. Robert Berkley Jr., who is the insurer’s president and chief operating officer, was the 25th highest paid Connecticut executive making more than $9 million in 2012. His pay more than doubled.

Last year’s highest paid exec Louis Chenevert fell to No. 2 on the list in 2012. The CEO and chairman of Hartford’s United Technologies Corp. saw his pay decline slightly to $27.6 million. That included a $1.7 million base salary and $7.8 million in stock awards.

Executive pay has become a hot button issue as compensation packages for many top executives have increased significantly over the years. That has led shareholders, government officials, and other interest groups to demand more accountability from top executives and boards of directors.

Federal lawmakers responded to public outcry in 2011 by adopting tougher “say-on-pay” provisions that allow shareholders to vote on proposed executive pay packages. But those votes are nonbinding and can be ignored by a company’s board of directors.

In 2011, for example, Stanley Black & Decker shareholders rejected a pay plan for the New Britain toolmakers former CEO Nolan D. Archibald. But Archibald still took home a total pay package of $64.4 million that year.

David Cadden, a professor of entrepreneurship and strategy at Quinnipiac University, said he believes shareholders and other outside sources will continue to demand that executive compensation be more closely linked to a company’s financial performance.

“I think you’re going to see that as an increasing trend,” Cadden said. “More external hedge fund managers are going to want to see better performance for the pay they’re giving CEOs. Boards of directors are going to try to tie pay in more direct relation to performance.”

In 2012, Cigna president and CEO David M. Cordani saw the largest drop in pay on HBJ’s list.

His $12.9 million pay package was 32.5 percent less than what he earned in 2011. Cordani was the 17th highest paid executive in the state last year. In 2011, he was the fifth highest paid CEO.

The company with the most representatives on the list is Fairfield’s General Electric. The technology and energy conglomerate had five senior executives who each made at least $18 million last year. GE was led by chairman and CEO Jeffrey Immelt who earned $25.8 million in 2012, a 19.6 percent increase from a year earlier. Immelt also had the highest base salary and non-equity incentive plan compensation of anyone on the list at $3.3 million and $12 million, respectively.

Cadden, the Quinnipiac professor, said he has noticed that executive pay is starting to rebound after some senior executives saw pay cuts following the 2008 financial crisis.

The 25th highest paid Connecticut executive in 2011, for example, made $6.9 million. Last year,’s president and CEO Jeffrey H. Boyd owned the 25th spot, earning $10.3 million.

“It looks as though executive pay is on an uptick as they keep recovering from the 2008 debacle,” Cadden said. “Salaries may be precipitously low, but most of the largest components of that pay come from stock options and other sources.”

Twelve of the names on HBJ’s executive pay list come from Fairfield County companies while seven come from the city of Hartford.

Stanley Black & Decker president and CEO John Lundgren, who topped the list two years ago, saw his ranking fall even further from 12th to 16th after earning $13 million in 2012. That was a 4.9 percent decrease.

Meanwhile, Stanley Black & Decker’s Archibald remains on the list at 21st after earning $10.6 million.

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