In May, as the Covid-19 pandemic started to make a big impact on corporate income statements, Jabil said its top executives would take pay cuts and forego cash bonuses.
Even with those cuts, Mark Mondello, CEO of the St. Petersburg-based manufacturing services firm, had a total compensation package of $12.7 million for fiscal year 2020, which ended Aug. 31. That was an 11 percent increase from his total pay package of $11.4 million in fiscal year 2019. The value of stock awards — including some shares that Mondello was awarded but won’t receive for several years — accounted for nearly all of the increase in FY 2020, according to a proxy Jabil filed late Wednesday with the U.S. Securities and Exchange Commission.
Jabil (NYSE: JBL), the largest company headquartered in St. Petersburg with $27.3 billion in revenue in FY 2020, incurred about $141.9 million in direct costs associated with the Covid-19 outbreak. Its factories were used less as a result of travel disruptions and government restrictions, and the company spent money to buy personal protection equipment for its workers worldwide. Jabil’s suppliers also were impacted, putting a squeeze on the supply chain and making it tough to source materials needed to fulfill customer production requirements and to transport completed products to customers.
To reduce costs, Mondello and other executives said they would reduce their base salaries by 25 percent from June 1 to Nov. 30. They also gave up cash bonuses. The Jabil board of directors agreed to cut their annual retainers by 25 percent from June 1 to Nov. 30. Jabil also said it reduced its worldwide workforce and implemented voluntary early retirements.
Mondello’s base pay dropped from $1.215 million in FY 2019 to $1.145 million in FY 2020. He received a $2.05 million cash bonus in FY 2019, and none in FY 2020. Stock awards, which make up the bulk of his pay package, were valued at $11.56 million in FY 2020, compared to $8.14 million in FY 2019. The stock awards include both performance-based and time-based restricted stock units, the proxy said.
Mondello’s FY20 total compensation was 1,640 times that of the total pay package for the median worker at Jabil. The company employs about 140,000 people worldwide, with 93 percent of them working outside of the United States. While the median worker’s pay was $7,753 in FY20, Jabil said its pay is competitive with local market practices.
Four other Jabil executives named in the proxy also received stock award increases, although their total pay packages dropped in FY20. They are:
• Michael Dastoor, chief financial officer, FY20 total compensation of $2.7 million, down 4.5 percent
• Steven Borges, executive vice president and CEO, regulated industries, FY20 total compensation of $2.36 million, down 24.5 percent
• Michael Loparco, executive vice president and CEO, EMS, FY20 total compensation of $2.6 million, down 14.3 percent
• Kenneth Wilson, executive vice president and CEO, Green Point, FY20 total compensation of $2.9 million, down 2.8 percent
Shareholders also benefited during FY20. Jabil’s stock price was $28.41 a share on Sept. 3, 2019, the first business day of the fiscal year, and ended the year on Aug. 31, 2020 at $34.15 a share. The stock closed Wednesday at $39.56 a share.
Jabil shareholders will get to cast non-binding advisory “say on pay” votes at the company’s annual meeting, scheduled to take place online Jan. 21.