Constellation Energy CEO gets $5.7M 2008 package

COLUMBUS, Ohio — Constellation Energy Group’s top executive, Mayo Shattuck III, received total compensation valued at $5.7 million in 2008, according to Associated Press calculations of data filed with regulators Wednesday.

The pay package represents a nearly 56 percent drop in value from his 2007 compensation, and follows a year in which the wholesale power generator was nearly forced into bankruptcy by a liquidity crisis.

Shattuck, Constellation’s chairman, president and CEO, received a salary of $1.3 million in 2008, a 7 percent increase from 2007, according to the filing with the Securities and Exchange Commission.

But Shattuck received no performance-based award after getting a $5.5 million payout in 2007.

He also received stock options worth $4.25 million when they were awarded Feb. 21, down 29 percent from 2007, according to the filing. But those options are currently of little value since their exercise price of $93.97 is far above the stock’s Wednesday closing price of $23.31.

Shattuck also received other compensation of $147,217, that included such things as a 401(k) match, financial planning, and personal use of a company driver.

The collapse of credit markets coupled with extreme volatility in the energy markets sent Constellation’s stock price tumbling from $107.97 to $13 and its earnings plunging last summer.

A unit of Warren Buffett’s Berkshire Hathaway stepped up and agreed to buy the Baltimore-based parent of Baltimore Gas & Electric for $4.7 billion last September — including an immediate $1 billion infusion to help stabilize the company.

Constellation quickly accepted the $26.50-per-share offer from MidAmerican Energy Holdings Co., but the deal angered shareholders who thought it was too cheap.

Last December, Constellation accepted what it said was a better offer of $4.5 billion for half of its nuclear business from French company Electricite de France SA. The deal allows Constellation to remain an independent company while deepening a relationship with EdF in which the two already have a joint venture to develop new nuclear operations in the U.S.

The deal should close this year.

In the fourth quarter, the company radically altered its near-term objectives to focus on generating cash and collateral, to the nearly complete sacrifice of earnings, according to the filing.

For 2008, Constellation posted a loss of $1.31 billion, or $7.34 per share, compared with a profit of $821.5 billion, or $4.50 per share, in 2007. Revenue slipped 6.5 percent to $19.81 billion from $21.19 billion.

“We felt it was right by shareholders,” board member Robert Lawless said of the smaller pay packages for Shattuck and other executives given the lower earnings projections.

“We’re comfortable with his leadership,” Lawless said.

The Associated Press formula is designed to isolate the value 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, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.