EBay Chief Executive John Donahoe received compensation valued at $22.5 million in 2008, according to a Monday regulatory filing, but a large part of his pay package consisted of equity awards that are currently of little value in the wake of a sharp decline in the company’s stock price.
Donahoe, 48, took over as head of the San Jose, Calif.-based online auction site operator after Meg Whitman retired at the end of March 2008. He had previously been eBay’s head of marketplaces.
According to the proxy statement eBay filed with the Securities and Exchange Commission, Donahoe’s 2008 pay package included a salary of $879,808 and a bonus of $500,000, which represented the fourth and final installment of Donahoe’s special retention bonus awarded in 2005 when he joined the company.
Donahoe also received other compensation equal to $279,108, including $273,447 worth of personal air travel.
He received stock and option awards valued at $20.1 million when they were granted. But of this, $9 million was in option awards granted when eBay shares traded around $25 – the stock is currently trading at less than half that price. Whitman, who became a special adviser to Donahoe after exiting as CEO, received a salary of $713,947 and $215,051 in other compensation in 2008. She has since formed an exploratory campaign to run for governor of California.
Donahoe leads eBay at a time when the economic decline is causing consumers to cut back on spending, hurting retail sales both off and on the Web. EBay is no exception: It reported growth for the full year, but in the fourth quarter of 2008 – typically a busy time of year for eBay and other e-commerce companies due to the holiday season – its earnings and revenue declined.
In 2008, eBay earned $1.78 billion, or $1.36 per share, on revenue that totaled $8.54 billion. Its shares declined 58 percent over the course of the year, ending at $13.96.
The proxy statement filed with the SEC was required ahead of eBay’s annual shareholder meeting on April 29.
The Associated Press calculations of total pay include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.