The top five executives at Harley-Davidson Inc. received discretionary and performance-based bonuses totaling almost $5.7 million in 2011, including more than $2.8 million for CEO Keith Wandell, who led the motorcycle company's restructuring.
The bonuses and other compensation were revealed Tuesday in Harley-Davidson's annual proxy filing with the Securities and Exchange Commission.
Including stock awards, discretionary and performance-based bonuses, Wandell received $7.23 million in compensation in 2011, up almost 13% from 2010, according to the filing.
His base salary was $975,037, the same as in 2010. Wandell requested that his salary not be increased, the proxy noted.
Wandell, who has been with the company nearly three years, launched a restructuring that realized $217 million in saving for the company in 2011, including job reductions at Harley's largest motorcycle assembly plant in York, Pa.
The restructuring eliminated more than half of the 1,900 jobs at the York plant but kept the factory from being moved to Kentucky.
This spring, Harley is implementing a new production planning system aimed at building motorcycles to more closely match demand. Some of the changes launched in York are coming to the company's Wisconsin plants.
In 2011, Harley-Davidson produced a profit of $599.1 million, or $2.33 a share, up from $146.5 million, or $1.11 a share, in 2010.
But the company has built fewer motorcycles than before the recession, shipping 233,117 bikes last year compared with 349,196 in 2006.
After the global economy stalled in 2008, sending motorcycle sales plunging 23% the following year, Harley embarked on its plan to slash costs and transform the way it manufactures.
Work was outsourced so the company could focus on efficiencies and core competencies, including making motorcycle frames and engines, painting and assembling bikes.
Harley has figured out how to be profitable at much lower production volumes, said analyst Craig Kennison with Robert W. Baird & Co.
"Cost-cutting isn't a fun exercise. But surviving is paramount, and Harley has done that," Kennison said.
Wandell was hired from Johnson Controls Inc. where, as chief operating officer, he was responsible for controlling costs and answering to Wall Street.
"He has done exactly what he said he would do," Kennison said of Harley's streamlining operations.
Some of the changes have been painful, including job losses in Wisconsin and Pennsylvania. The labor contract negotiated in York in 2009 also slashed pay raises until 2017.
Union officials say they will expect more from the company, now that it's on the path to recovery.
"It will be a different bargaining table the next time around," said Frank Larkin, spokesman for the International Association of Machinists and Aerospace Workers, which represents most of the Harley-Davidson plant workers in York.
Tuesday, Harley shares closed at $49.79, down 69 cents. In recent weeks, the shares have hit 52-week highs several times.
Given the restructuring, the company is poised to do even better when the economy improves, said analyst Robin Diedrich with Edward Jones Co.
"Generally, the sentiment is pretty strong," Diedrich said
The top five executives at Harley-Davidson Inc. earned almost $5.7 million in bonuses in 2011.
Keith Wandell, president/chief executive officer: $2,803,233 bonus, $7,232,147 total pay.
John Olin senior vice president/chief financial officer: $611,123 bonus $1,785,030 total pay.
Matthew Levatich, president/chief operating officer, Harley-Davidson Motor Co.: $1,117,093 bonus, $3,065,869 total pay.
Lawrence Hund, president/chief operating officer, Harley-Davidson Financial Services: $737,917 bonus, $2,398,907 total pay.
Paul Jones, vice president/general counsel: $389,390 bonus, $1,007,524 total pay.
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