Rockwell Chairman Awarded Raise of $100,000

SEAL BEACH — Rockwell International Corp., which posted a 30% increase in operating profit last year and saw its stock price climb, boosted Chairman and Chief Executive Donald Beall’s salary and annual bonus 3.5% to $2.9 million from $2.8 million in 1995.

Beall, who engineered the recently concluded $3.2-billion sale of Rockwell’s defense and aerospace businesses to Boeing Co., also received options to buy 265,000 shares of Rockwell stock at $51.875 a share, the company reported in a recent filing with the Securities and Exchange Commission. The options could be worth millions to Beall if the company’s stock, which closed Monday at $61 a share, keeps climbing.

In 1995, for instance, Beall got options to buy 240,000 shares of stock at $37.625 per share. At Monday’s closing price, those options now are worth more than $6 million, presuming he did not cash in any of the shares when the stock price was lower.

Options are part of what executive compensation experts call long-term compensation and reflect a growing trend by corporations to tie a big chunk of their top executives’ pay to the ongoing performance of the company. If Rockwell’s stock value falls below the so-called exercise price of the shares Beall has options to buy, they are worth nothing to him.

Options granted in one year typically must be held for a year or more before they can be exercised. Rockwell’s options become exercisable in three equal installments over three years.

Beall’s overall 1996 pay package reflects “a pretty modest increase” said George B. Paulin, president of Los Angeles compensation consulting firm Frederic W. Cook & Co. Inc.

Last year, the average corporate chief executive got a 21% hike in pay, bonus and long-term compensation combined, compensation consultant Graef Crystal said.

Beall’s salary rose to $907,500 in 1996, an 11.3% increase from $815,000 in 1995, the company said in its SEC filing. But his bonus remained unchanged at $2 million.

Don Davis, Rockwell’s president and chief operating officer, saw his salary and bonus last year jump 16.7% to $1.4 million from $1.2 million in 1995. Davis’ salary rose to $600,000 from $530,000 and his bonus was $760,000, up from $660,000 in 1995, the filing said.

Davis received options on 125,000 shares exercisable at $51.875 a share in 1996. Rockwell’s stock climbed 15.1% last year to $60.875 per share.