UPS chief’s pay package grows to $13.7 million

Shipping giant’s profits drop 29% in 2015; pension costs cited.

UPS Chief Executive David Abney’s pay package rose more than 20 percent last year even as the shipping giant struggled with weakening profits from dropping off online orders at homes.

Abney’s total compensation was $13.7 million last year, vs. almost $11.3 million the previous year, according to its proxy filed this week. His package included a $1.1 million salary, almost $10.2 million in stock-related awards and a $387,741 bonus.

About a third of the boost came from an increase in the value of pension benefits.

Other top executives at the Sandy Springs-based company received similar or bigger package boosts in percentage terms, according to the proxy.

“Under David’s leadership as CEO, UPS ended 2016 with positive results in many areas including record earnings,” the company said in its filing.

“However, the challenges of forecasting and adapting the UPS business model to the growing (business-to-consumer) environment (caused costs to grow) at a disproportionate rate and kept overall results below expectations,” the company said. UPS said the strong dollar also crimped the company’s bottom line.

UPS reported $3.4 billion in profits last year, down 29 percent from 2015. Part of the decline was due to billions of dollars in pension costs for its U.S. and overseas workers.

Revenue increased more than 4 percent last year, to $60.9 billion. But some analysts were disappointed that rising online order delivery volume hurt profit margins.

UPS Chief Executive David Abney will receive a 20 percent increase in his pay package.