Magna International Inc. chairman Frank Stronach had his best year yet at the pay window in 2002, while compensation more than doubled for his daughter Belinda Stronach, the company's chief executive officer.
Mr. Stronach, who founded the auto parts giant in a Toronto garage in 1957, received $58.1-million all told last year, with most of it coming from consulting fees from three European subsidiaries.
He received a base salary of $200,000 (U.S.), consulting fees of $33-million, and exercised stock options worth $6-million (Canadian).
His total was arrived at by converting the salary and bonuses to Canadian dollars using the average exchange rate for the year.
He will receive $36-million (U.S.) from the consulting contracts this year.
Ms. Stronach, who added the title of president to her position as chief executive officer last February, received a pay packet worth $9.1-million (Canadian).
That's based on a salary of $110,500 (U.S.), a bonus of $4-million, and options worth $2.7-million (Canadian). Ms. Stronach received $2.7-million in 2001.
The information is contained in the proxy circular for Magna's annual meeting, which was submitted to securities regulators late Wednesday.
Ms. Stronach received an increase in profit sharing and stock options because she was underpaid compared with CEOs at 25 companies against which Magna's performance is measured, the compensation committee of Magna's board of directors said. The committee is chaired by former federal industry minister Ed Lumley and includes former Ontario premier Mike Harris, two of several ex-politicians on the board of Magna or its publicly traded subsidiaries.
"Mr. F. Stronach's historical compensation reflects his special position as the corporation's founder and architect of Magna's unique, entrepreneurial corporate culture," the committee said, repeating a paragraph that has appeared in the proxy circular for several years.
Mr. Stronach controls 73 per cent of the votes, mainly through class B shares that carry 500 votes each.
It's the control of those shares and the ability to block a potential takeover -- not the annual salary figures -- that causes a so-called Frank discount on the company's shares, one analyst who follows the company said yesterday. Some U.S. investors in particular shun companies with multiple voting shares controlled by one person, the analyst said.
"The story's pretty good from a performance standpoint," the analyst said.
Last year, that performance consisted of a final profit of $554-million (U.S.) or $5.83 a share on record revenue of $12.97-billion. That compared with profit of $579-million or $6.55 a share on sales of $10.51-billion in 2001.
In addition to founding the company and still heading it as chairman, Mr. Stronach is also the architect of the "spinco" philosophy, which involves spinning off parts of its subsidiaries in public share offerings.
So far, Magna has spun off chunks of three of its auto parts businesses and part of its entertainment and racetrack arm, Magna Entertainment Corp., the creation of which was also spearheaded by Mr. Stronach.
In a message in Magna's annual report, also submitted to regulators, Mr. Stronach reiterated that the company wants to spin off its Magna Steyr vehicle assembly division and Magna Donnelly mirror operation within the next year.
Bonus payments also rose for Magna's other key senior executives, including executive vice-chairmen Siegfried Wolf and Manfred Gingl, chief financial officer Vince Galifi and executive vice-president of operations Tom Skudutis.
Jim Nicol, who departed as president and chief operating officer in January, 2001, received $6.4-million (Canadian).
Magna's class A shares fell 44 cents yesterday to close at $81.06 on the Toronto Stock Exchange.