Eaton CEO Got $12.1 Million in Compensation

Eaton Corp.'s Alexander M. Cutler, chairman, president and chief executive officer, in 2006 received compensation the company valued at $12.1 million, the industrial parts and systems maker said in a regulatory filing Friday.The Associated Press calculation of total pay includes executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.According to a proxy filing with the Securities and Exchange Commission, Cutler received a salary of just over $1 million, incentive plan pay of nearly $8.2 million and other compensation totaling $139,961.Included in that last figure are perks, such as: a car allowance of $18,000, an executive benefit allowance of $14,400; personal use of company aircraft valued at $55,800; and a $17,289 reimbursement of taxes associated with the use of company-owned aircraft.Directors have authorized Cutler to use company aircraft for professional and personal reasons to enhance his productivity and personal security.Cutler also received an annual premium for company-purchased life insurance of $11,472, $8,800 in matching payments to his employee savings plan, and financial planning and tax preparation worth $14,200.Eaton reported above-market earnings on non-qualified deferred compensation to Cutler of $3,902.The total amount listed in the filing for fair value of restricted stock and options awards that were valued at $2.77 million when they were granted.Cutler, 55, became president and chief operating officer in 1995 and was named chairman, CEO and president in 2000. He previously had led Eaton's industrial and controls units.The Eaton board's compensation committee noted that Cutler surpassed performance expectations. The committee also bases compensation on what executives are paid within a peer group of companies including General Electric , Illinois Tool Works , ITT Industries , United Technologies , Honeywell and Parker Hannifin .In January, Eaton said fourth-quarter earnings were up nearly 15 percent from a year ago, driven by continuing growth of its electrical and fluid power business segments. For the year, Eaton's profit grew 18 percent to $950 million, or $6.22 per share, on sales of $12.37 billion.Eaton has 60,000 employees and plants in 29 countries. Its products include transmissions, couplings, hoses, motors, circuit breakers, filters, pumps and cockpit controls.Eaton shares rose 37 cents to close at $82.52 on the New York Stock Exchange. The stock has traded within a one-year range of $62.81 and $84.89.