Discover CEO’s pay almost doubles in 2010

By Associated Press
Posted Feb. 18 at 3:35 p.m.

Discover Financial Services Co. said Chairman and Chief Executive David Nelms received compensation valued at about $8.5 million in fiscal 2010, almost double from the prior year.

The credit card issuer said in a regulatory filing Friday that Nelms’ base salary increased to $4.55 million from $1 million the previous year. His salary was made up of $1 million in cash and $3.55 million in stock.

Nelms also was awarded a $1.7 million bonus, according to the filing. A year earlier, he received no bonus. His restricted stock awards and options fell 32 percent to $2.3 million. Additionally, the company contributed $17,150 to Nelm’s 401(k) retirement plan.

Nelms received a total of $4.3 million in all compensation in 2009, and $2.4 million in 2008 at the height of the financial crisis.

In December, Discover said it is reducing the base salaries for its top executives for 2011 and basing part of their compensation on stock earned if the company meets certain performance benchmarks. The company said the changes help align executive pay with company performance.

Nelms’ salary will be $1 million for fiscal year 2011.

The AP’s formula for calculating executive compensation is designed to isolate the value that the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don’t include changes in the present value of pension benefits, making the AP total different in most cases than the total reported by companies to the SEC.

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