Investors may find solace in the correlation between compensation awards and financial performance at the 37 firms in IBO’s Stock Indexes. In fiscal 2012 (FY12), total compensation packages declined for 28 of the 44 presidents, CEOs or heads of dedicated business units at these companies who have held their respective roles for more than one year. Average total compensation fell 1.3% to $4,273,002. The median percentage change in total compensation fell 2.5%, as roughly 70% of the executives either earned lower annual cash incentives or missed the minimum threshold to be eligible for awards. The median percentage change in annual incentives dropped 16.7%.

Correspondingly, in FY12, organic revenue growth slowed for a majority of the companies, and average adjusted EPS grew 4% compared with 20% in fiscal 2011. IBO’s executive compensation tables are based on FY12 data provided by SEC filings for the analytical instrument and lab product companies in the four IBO Stock Indexes. This year, the tables are organized by company annual sales: presidents and CEOs of companies with sales greater than $2.5 billion, $2.5 billion–$500 million, and less than $500 million, and by heads of dedicated instrument or lab product business units.

In the tables, “annual incentives” consist of the sum of non-equity incentives and discretionary bonuses. “Long-term compensation” is defined as fair-value stock awards and option awards received. “Other” compensation is the sum of nonqualified deferred compensation, supplementary retirement plans and perquisites.

While a majority of the executives earned lower annual cash incentives in FY12, 66% received increased base salaries and half earned higher long-term stock and equity grants. The median percentage change in salaries and long-term compensation increased 3.1% and 3.2%, respectively.

As in years past, the values of equity grants for a few select executives stand above the rest. In FY12, five executives each received total compensation of more than $13 million, including equity grants of more than $10 million. Thermo Fisher Scientific President and CEO Mark N. Casper recorded the largest percentage change in total compensation among the tables’ executives, as his compensation soared 145.7% to $13.6 million. This jump was due to a 240.8% climb in stock grants to $10.4 million. However, his equity awards were limited in the previous year due to a $32.4 million multiyear equity award in 2009. Mr. Casper achieved performance measures in 2012 based on organic revenue and adjusted EPS growth, product introductions, acquisitions, and expansion and growth in China.

Despite a modest 1.1% increase, Danaher President and CEO H. Lawrence Culp, Jr., received $21.9 million in total compensation in FY12. Equity compensation for Mr. Culp rose 3.2% to $15.5 million, which was partially based on the integration of Beckman Coulter (see IBO 2/15/11). Conversely, Mr. Culp’s annual incentives were slightly lower, as the company’s adjusted EPS growth slowed.

Total compensation for Roper Industries President and CEO Brian D. Jellison climbed 21.4% to $18.1 million, including a 27.3% increase in long-term compensation to $14.0 million. While Mr. Jellison received the same number of shares as a year ago, the higher equity value reflected the change in the company’s yearly stock price at the time of the awards. He also achieved a maximum annual incentive bonus of $2.6 million based on adjusted net income measures.

Both Pall President and CEO Lawrence Kingsley and former Illinois Tool Works (ITW) CEO David B. Speer received lofty compensation packages, but were excluded from the average comparisons due to the timing of their appointments and one-time exceptional payments. Mr. Kingsley, who was appointed to his position effective October 3, 2011, received the largest long-term and total compensation package in FY12 among executives in the tables, totaling $20.3 million and $33.9 million, respectively. For his new hire, Mr. Kingsley received a signing bonus of $1.5 million in cash and $4.0 million in equities. His package also included $11.7 million in equity awards to compensate for the value forfeited by leaving IDEX. Pall also paid former President and CEO Eric Krasnoff $7.9 million in 2012. Mr. Speer, who served as ITW CEO since 2005, sadly passed away due to health issues in 2012. His total compensation was $18.7 million, but included $5.3 million in equity from outstanding options due to his passing.

Other notable compensation packages included a payout of $10.3 million to Life Technologies Chairman and CEO Gregory T. Lucier. Despite a 5.8% decline in total compensation, his annual incentive compensation climbed 37.6% to $2.2 million as the company exceeded non-GAAP net income targets. As part of a new employee agreement in 2011 designed to increase retention value, the company agreed to award Mr. Lucier at least 150,000 restricted stock units in 2012 and 2013. Mr. Lucier’s new position following the proposed acquisition by Thermo (see IBO 4/15/13) will be of great financial significance due to a $45.3 million termination clause within two years of a change in control.

In spite of lower total compensation due to missed performance targets, two other executives received more than $10 million. Total compensation for PerkinElmer Chairman and CEO Robert F. Friel fell 15.5% to $10.8 million due to missed free cash flow targets and an added retention equity award in the previous year. In 2012, Mr. Friel was awarded the largest cash incentive among the tables’ executives, with a payment of $5.6 million. This bonus included $4.4 million based on three-year performance measures, including organic revenues, operating margin and stock price. Other than Mr. Culp, Mr. Friel was the only other executive in the tables to receive a portion of his long-term incentive plan in the form of cash. Agilent Technologies President and CEO William P. Sullivan recorded a 1.1% decline in total compensation to $10.1 million. His increase in equity grants mostly offset the decline in incentive compensation due to missed revenue targets.

For the eight executives discussed above, average long-term performance compensation, which primarily consists of time-vested equity units that are contingent upon future annual financial targets, comprised roughly 71% of their total compensation in FY12. For the majority of companies in the tables, a greater emphasis was placed on performance-based restricted stock units over option grants, as they typically provide more stable value and require fewer shares.

Not all executives earned compensation packages as generous as those of the tables’ top earners. Affymetrix President and CEO Frank Witney, PhD, recorded the largest decline in total compensation in FY12 among the tables’ executives, as it fell 76.0% to $657,291 due to stricter performance criteria. Dr. Witney earned neither a cash bonus nor equity award due to missed revenue growth and operating income targets, as well as certain business optimization goals. Total compensation for Waters President and CEO Douglas A. Berthiaume fell 59.8% to $1.1 million in FY12. He missed the minimum requirement for an annual incentive payout based on adjusted EPS and operating income. As in prior years, he declined to be considered for an option grant.

Techne President and CEO Thomas E. Oland received $261,343 in total compensation in FY12. For several years, he has waived a salary increase, cash and stock options, but he does own 5.7% of total shares outstanding. Transgenomic President and CEO Craig J. Tuttle and Kewaunee Scientific President and CEO William A. Shumaker earned $363,806 and $498,165 in total compensation, respectively. Both executives missed the minimum financial goals to be eligible for a cash award. Also, three executives did not receive an annual incentive, having missed the minimum financial thresholds: Waters Division President Arthur G. Caputo, and Harvard Biosciences Chairman and CEO Chane Graziano and President David Green.

Similar to Mr. Oland, two other executives recommended self-imposed restrictions on compensation. Bruker President and CEO Frank H. Laukien, PhD, voluntarily forfeited $125,000 of cash incentives due to an ongoing internal review (see IBO 3/15/12). Nevertheless, his total compensation climbed 108.6% to $1.9 million due to a larger equity grant. Luminex President and CEO Patrick J. Balthrop requested a 15% reduction in his cash bonus due to missed adjusted operating profit goals. His total compensation fell 15.0% to $3.2 million. However, he received the largest percentage increase in base salary among executives in the tables, as it climbed 35.9% to $700,000, in order to be more competitive with the company’s peer group.

Several executives were monetarily rewarded for specific performance goals or other discretionary measures in FY12. Illumina President and CEO Jay T. Flatley earned a $200,000 cash bonus for shielding the company against Roche’s hostile takeover bid (see IBO 1/31/12). AMETEK Chairman and CEO Frank S. Hermance exceeded adjusted EPS targets and received a $432,800 bonus for discretionary factors, including global expansion, operating margin, acquisitions and new products. Nanometrics President and CEO Timothy J. Stultz missed minimum revenue and adjusted EPS performance levels, but was awarded a cash bonus of $139,500 for discretionary measures. In his second year, Yves Baratelli, president of Pall Life Sciences, earned a 240% increase in total compensation due to a $4.2 million supplementary pension award.

Presidents and CEOs

In FY12, total average compensation for the 35 presidents and CEOs in the tables with more than one year of service declined 1.6% to $4.8 million. However, excluding Mr. Casper’s large equity increase, total average compensation declined 6.6% to $4.5 million, including a 17.5% decline in average annual incentives to $801,165 and a 3.6% decline in average long-term compensation to $2.8 million. Conversely, the average base salary increased 5.5% to $689,459.

Presidents of Dedicated Business Units

For the nine heads of the dedicated business units listed in the table on page 7 with reported salaries for FY12 and FY11, total average compensation grew 1.3% to $2.4 million, including a 3.0% increase in average long-term compensation to $1.4 million. Average base salary expanded 6.0% to $470,051. However, average annual incentives fell 25.9% to $281,320.

The respective presidents of Agilent Life Science and Chemical Analysis, Nicolas Roelofs and Michael R. McMullen, each received restricted shares valued at $930,250 as a special one-time retention bonus. Otherwise, their compensation would have declined. Cash bonuses for both were based on the performance of the individual business segments, as well as on specific targets for the combined Chemical Analysis and Life Science Groups. Enzo Biochem Life Sciences COO Andrew P. Whiteley received only half of his eligible bonus due to below target results based on segment revenue and operating margin.

New to the tables this year is former Caliper Life Sciences President and CEO E. Kevin Hrusovsky, who joined PerkinElmer following the acquisition of Caliper (see IBO 9/15/11), and was promoted to executive officer and senior vice president and president of Life Sciences and Technology, effective January 1, 2012. Compared with his former position, Mr. Hrusovsky’s total compensation declined 9.2% in FY12 to $1.6 million. However, he was not eligible for any long-term cash incentives due to his recent appointment. Alan J. Malus, who previously served as president of Laboratory Products & Services at Thermo, was promoted to executive vice president and president of Analytical Technologies in January 2012. Mr. Malus earned a higher bonus and equity grant following his promotion and strong business unit performance. His total compensation climbed 28.1% to $4.7 million.

 .                                 Annual Cash Compensation              Long-Term Comp.  Other   Total Comp.     Revenue

 Executive            Title             Annual   %Chg. Total Ann. %Chg. Stock&Opt. %Chg.  Comp.  Total  %Chg.   FY12   %Chg.

                               Salary Incentives       Cash Comp.        Grants                  Comp.          ($M)

                               ($000)   ($000)           ($000)          ($000)          ($000)  ($000)

 Presidents and CEOs of Companies with Sales > $2.5 Billion

 Agilent Technologies                        

 William P. Sullivan   P/CEO    $990   $1,248   -35%    $2,238   -23%    $7,867     8%     $31  $10,136  -1%   $6,858   4%

 AMETEK                      

 Frank S. Hermance   COB/CEO  $1,082   $1,417   -30%    $2,499   -18%    $3,450    23%    $772   $6,721   0%   $3,334  12%

 Becton Dickinson & Co.                           

 Vincent A. Forlenza COB/P/CEO  $900   $1,080    49%    $1,980    37%    $5,734   103%  $1,704   $9,418  88%   $7,708   2%

 Danaher                     

 H. Lawrence Culp, Jr. P/CEO  $1,118   $4,525     0%     $5,643   -4%   $15,542     0%    $714  $21,899   0%  $18,260  13%

 Illinois Tool Works                        

 David Speer Former COB/CEO   $1,202   $3,023    38%    $4,225    26%   $12,591    73%  $1,862  $18,678  49%  $17,924   1%

 Life Technologies                      

 Gregory T. Lucier  COB/CEO   $1,200   $2,160    38%    $3,360    22%    $6,750   -16%    $158  $10,268  -6%   $3,799   1%

 Mark P. Stevenson   P/COO      $750     $831    27%    $1,581    14%    $3,075   -23%    $639   $5,295 -10%   $3,799   1%

 Pall                          

 Lawrence Kingsley   P/CEO      $767   $2,525    NA     $3,292     NA   $20,254     NA $10,316  $33,863   NA   $2,672   6%

 Roper Industries                      

 Brian D. Jellison COB/P/CEO  $1,150   $2,588    5%     $3,738     5%   $14,043    27%    $305  $18,086  21%   $2,993   7%

 Sigma-Aldrich                           

 Rakesh Sachdev   P/CEO         $792     $657  -31%     $1,449   -12%    $3,024    41%    $113   $4,585  17%   $2,623   5%

 Thermo Fisher Scientific                      

 Mark N. Casper   P/CEO       $1,030   $1,893   46%     $2,923    27%   $10,442   241%    $190  $13,555 146%  $12,510   8%

 Xylem                          

 Gretchen W. McClain P/CEO      $935     $873   26%     $1,808    36%    $4,250   -40%    $142   $6,200 -29%   $3,791   0%

 Average                        $993   $1,902    5%     $2,895     6%    $8,919    23%  $1,412  $13,225  18%   $7,498   6%

 Presidents and CEOs of Companies with Sales of $2.5 Billion–$500 Million

 Bio-Rad Laboratories                          

 Norman Schwartz P/CEO          $803     $516  233%     $1,320    43%    $3,185    10%     $16   $4,521  18%   $2,069   0%

 Bruker                      

 Frank Laukien, PhD COB/P/CEO   $444     $203  -40%       $647   -16%    $1,206   968%      $8   $1,861 109%   $1,791   8%

 FEI Company                          

 Don R. Kania      P/CEO        $658     $581  -53%     $1,239   -33%    $2,939    20%      $3   $4,181  -3%     $892   8%

 Illumina                      

 Jay T. Flatley    P/CEO        $803   $1,063   63%     $1,866    30%    $6,288   -26%     $17   $8,171 -18%   $1,149   9%

 Mettler-Toledo Int'l                        

 Olivier A. Filliol P/CEO       $941     $473  -58%     $1,414   -32%    $2,800     0%    $170   $4,385 -17%   $2,342   1%

 MKS Instruments                      

 Leo Berlinghieri   P/CEO       $625     $456  -15%     $1,080    -5%     $2,000    7%  $2,692   $5,772 -18%     $644 -22%

 MTS Systems                          

 Jeffrey A. Graves P/CEO        $231     $462    NA       $692     NA       $926    NA    $129   $1,747   NA     $542  16%

 PerkinElmer                      

 Robert F. Friel  COB/CEO       $952   $5,562   -2%     $6,514    -1%     $3,200  -28%  $1,119  $10,833 -15%   $2,115  10%

 QIAGEN                          

 Peer M. Schatz      CEO      $1,226     $168  -69%     $1,394   -24%         $0    NM      $5   $1,399 -24%   $1,254   7%

 Teledyne Technologies                    

 Robert Mehrabian   COB/P/CEO   $893   $1,258  -49%     $2,151   -36%     $1,047   20%    $783   $3,981 -20%   $2,127  10%

 Waters                          

 Douglas Berthiaume COB/P/CEO   $815       $0    NM       $815   -65%         $0    NM    $248   $1,063 -60%   $1,844   0%

 Average                        $763     $977  -28%     $1,739   -18%     $2,145   -5%    $472   $4,356 -14%   $1,524   5%

 Presidents and CEOs of Companies with Sales < $500 Million

 Accelrys                          

 Max Carnecchia     P/CEO       $429     $433   66%       $863    28%     $1,008   71%     $11   $1,882  27%     $163  13%

 Affymetrix                      

 Frank Witney, PhD  P/CEO       $529       $0    NM       $529   113%       $116  -95%     $13     $657 -76%     $296  11%

 Enzo Biochem                          

 Elazar Rabbani, PhD COB/CEO    $555     $375  -30%       $930   -14%        $40  -34%    $162   $1,132 -14%     $103   1%

 Cepheid                      

 John L. Bishop    P/CEO        $577     $160  -68%       $738   -31%     $2,958  -14%     $81   $3,777 -17%     $331  19%

 Fluidigm                          

 Gajus V. Worthington P/CEO     $350     $175   17%       $525     5%       $828   36%      $0   $1,353  22%      $52  22%

 Harvard Bioscience                      

 Chane Graziano     COB/CEO     $602       $0    NM       $602     0%       $742   20%     $34   $1,378   9%     $111   2%

 David Green          P         $505       $0    NM       $505     0%       $627    1%     $23   $1,155   0%     $111   2%

 Kewaunee Scientific                          

 William A. Shumaker P/CEO      $400       $0    NM       $400     1%        $31  -35%     $68     $498  -1%     $103   3%

 Luminex                      

 Patrick J. Balthrop P/CEO      $654     $544  -24%     $1,198    -3%     $1,982  -22%     $35   $3,214 -15%     $203  10%

 MOCON                          

 Robert L. Demorest COB/P/CEO   $311     $143  -49%       $453   -21%        $58  -21%     $15     $526 -21%      $50  34%

 Nanometrics                      

 Timothy J. Stultz    P/CEO     $465     $140  -53%       $605   -16%       $956    NM     $22   $1,583 111%     $183 -21%

 Pacific Biosciences                        

 Michael Hunkapiller COB/P/CEO  $394       $0    NM       $394    NM      $1,783    NM      $0   $2,177   NM      $26 -23%

 Sequenom                      

 Harry F. Hixson, Jr.   CEO     $500     $304   -4%       $804     0%     $1,557  -33%      $7   $2,368 -25%      $90  60%

 William Welch        P/COO     $353     $159   -4%       $512     5%     $1,150    0%      $1   $1,663  -7%      $90  60%

 TECHNE                          

 Thomas E. Oland      P/CEO     $254       $0    NM       $254     0%         $0    NM      $7     $261  -2%     $315   8%

 Transgenomic                      

 Craig J. Tuttle      P/CEO     $346       $0    NM       $346     3%         $0    NM     $18     $364 -55%      $31  -2%

 Zygo                          

 Chris L. Koliopoulos P/CEO     $435     $229  -45%       $664   -21%     $1,171   20%     $17   $1,852   1%     $167  11%

 Average                        $451     $157  -27%       $607    -4%       $883  -17%     $30   $1,520 -13%     $148   8%

 Heads of Dedicated Business Units

 Agilent Technologies                        

 Michael R. McMullen   SVP/P    $571     $444   15%     $1,015    12%     $2,645   11%    $137   $3,796  11%   $1,559   3%

            Chem. Ana. Group

 Nicolas Roelofs       SVP/P    $546     $413    5%       $959     8%     $2,544   17%    $294   $3,797  21%   $1,582   4%

             Life Sci. Group

 AMETEK                      

 John W. Hardin          P      $392     $260  -31%       $652   -14%       $543   12%    $120   $1,315  -1%   $1,873  14%

          Elec. Inst. Group

 Bio-Rad Laboratories                        

 Bradford J. Crutchfield VP     $481      $56  121%       $537     7%       $236    2%     $13     $786   6%     $688  -1%

           Manager Life Sci.

 Bruker                      

 Mark Munch              P      $345     $169   NA        $514     NA         $0    NA     $16     $530   NA     $184   3%

          Bruker Nano & MAT

 Enzo Biochem                          

 Andrew Whiteley COO Life Sci.  $220      $40 -43%        $260   -10%        $12  -34%     $17     $289 -11%      $44 -11%

 Pall                      

 Yves Baratelli   P Life Sci.   $484     $356 -30%        $840   -16%       $703   20%  $4,215   $5,758 240%   $1,254   6%

 PerkinElmer                          

 E. Kevin Hrusovsky   SVP/P     $490     $263   NA        $753     NA       $833    NA     $17   $1,603   NA     $600   3%

          Life. Sci. & Tech.

 Sigma-Aldrich                      

 Franklin Wicks EVP/P Applied   $423     $229 -19%        $652    -3%       $833  -24%    $134   $1,619 -15%     $603   5%

 Teledyne Technologies                        

 Aldo Pichelli      P/COO       $405     $277 -58%        $682   -35%       $452   20%    $772   $1,907   0%   $1,410  10%

   (Inst., Aero. & Def. Elec.) 

 Thermo Fisher Scientific                    

 Alan J. Malus EVP/P Ana. Inst. $685     $813 103%      $1,498    45%     $3,132   21%     $97   $4,727  28%   $4,124   7%

 Thomas Loewald SVP/P Lab Prod. $450     $422   NA        $872     NA     $1,566    NA     $63   $2,501   NA   $5,990   4%

 Waters                          

 Arthur Caputo EVP/P/Waters Div.$509       $0   NM        $509   -61%     $2,611  -21%     $81   $3,201 -32%   $1,633  -1%

 Average                        $462     $288 -26%        $749    -9%     $1,239    3%    $460   $2,448   1%   $1,657   5%