03/19/2012 02:09 EDT | Updated 05/19/2012 05:12 EDT

Sears' new CEO received US$9.9 million in compensation in 2011

NEW YORK, N.Y. - Sears Holdings Corp. paid its chief executive US$9.9 million last year, including incentives the ailing department store operator offered to lure the former technology executive, according to an Associated Press analysis of a regulatory filing.

Lou D'Ambrosio, who became Sears' CEO in February 2011, received a signing bonus of $150,000 plus a base salary of $930,769 and $8 million in stock awards, according to a filing the company made Friday with the Securities and Exchange Commission.

D'Ambrosio got another $852,037 in perks, including $803,856 for charter and commercial airfare and ground transportation to commute from greater Philadelphia, where he lives, to Hoffman Estates, Ill., where Sears is based. And he received $29,985 for temporary housing in Hoffman Estates. Sears paid part of the income taxes due on those benefits.

Sears Holdings operates stores and websites under the Sears, Roebuck and Kmart brands, as well as the Lands' End catalogue and online retailer.

It is also the parent company of Sears Canada Inc. (TSX:SCC) which earlier this month announced plans to close three department stores in Vancouver, Calgary and Ottawa and sell back its leases to Cadillac Fairview for $170 million.

Over the past few months Sears Canada has laid off about 470 employees in an attempt to cut costs.

D'Ambrosio is a former CEO of communications company Avaya Inc., and he held several positions at IBM Corp. in 16 years with the company.

His hiring ended a three-year search that began after Sears' last chief executive resigned as its sales and profit fell seemingly relentlessly amid stiffening competition from stores of all stripes, from Wal-Mart Stores Inc. to Home Depot Inc. Interim CEO Bruce Johnson was paid a total of $5.3 million for 2010.

Since fiscal 2006, Sears' annual revenue has fallen 20 per cent, and its adjusted earnings before interest, taxes, depreciation and amortization has dropped 92 per cent, according to Credit Suisse analyst Gary Balter. For its fiscal year that ended Jan. 28, Sears had a net loss of $3.14 billion on revenue of $41.5 billion.

The company, whose board is led by billionaire investor Edward Lampert, engineer of the 2005 combination of Sears and Kmart, has announced numerous cuts in recent years. It plans to sell 11 of its stores to the real estate company General Growth Properties for $270 million, and it said it will cut its inventory by $580 million.

In a separate deal, Sears said last month that it will spin off of its smaller Hometown and Outlet stores as well as some hardware stores in a deal expected to raise $400 million to $500 million. And it said in December that it will close 100 to 120 of its roughly 4,000 stores in the U.S. and Canada, including Kmart and full-service Sears, Roebuck stores. It also has spun off the California hardware chain Orchard Supply Hardware Stores Corp.

The Associated Press executive compensation 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, performance-related bonuses, perks, 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.

- with files from The Canadian Press