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Departed P&G CEO made five percent more last year as bonus rose

Bob McDonald, then-CEO of Procter & Gamble, looks on during a water purification event at the Clinton Global Initiative in New York, in this
Bob McDonald, then-CEO of Procter & Gamble, looks on during a water purification event at the Clinton Global Initiative in New York, in this

By Jessica Wohl

(Reuters) - Procter & Gamble Co said on Friday it paid Bob McDonald, the former chairman, president and chief executive who abruptly left last spring, nearly 5 percent more last year as the company's performance improved.

McDonald was replaced in P&G's top spot on May 23 by his predecessor, A.G. Lafley. While McDonald's departure was termed a retirement, many saw the change as confirmation that his tenure was a disappointment and that the world's largest household products maker needed Lafley to reassure investors and employees.

McDonald earned a $3.3 million bonus in fiscal 2013, up from $2.4 million a year earlier, when P&G started a major restructuring.

Lafley earned almost $2 million as he took the helm for the last few weeks of the fiscal year, including salary, bonus and cash instead of stock and option awards, according to the P&G proxy filing.

In the fiscal year that ended in June, largely overseen by McDonald, P&G started to rebound with gains in market share.

The company met or exceeded targets that are factored into executives' compensation. Fiscal 2013 core earnings per share rose 5 percent, exceeding the company's forecast of a decline of 1 percent to an increase of 4 percent.

Free cash flow productivity also exceeded its goal, and organic sales rose 3 percent, the midpoint of P&G's forecast of 2 percent to 4 percent. Organic sales exclude the impact of acquisitions, divestitures and foreign exchange.

In fiscal 2012, P&G issued profit warnings and McDonald admitted the company was too slow to react to thriftier shopping habits, create product hits, and expand in fast-growing international markets.

McDonald's salary was flat at $1.6 million and his longer-term compensation was relatively unchanged. Overall, he took home more than $15.9 million, up from nearly $15.2 million the year before.

From May 23 to June 30, Lafley earned $1.94 million. He took home an additional $94,000 for consulting work during the year before he came back as CEO, bringing his total compensation to nearly $2.04 million, P&G said.

(Reporting by Jessica Wohl in Chicago; Editing by Jeffrey Benkoe)

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