Discover CEO receives $9.91 million in 2012 pay

NEW YORK Discover Financial Services (DFS) said its Chairman and CEO David Nelms received compensation valued at $9.92 million in the credit card company's 2012 fiscal year. That is a 28 percent drop from the prior year, and reflects lower stock awards.

Riverwoods, Ill.-based Discover said in a regulatory filing Friday that Nelms' base salary was unchanged at $1 million. He also received $5.78 million in stock awards, down from stock awards worth $9.6 million in the previous year.

Nelms' non-equity incentive compensation slipped to $3.12 million, from $3.2 million the previous year, according to a filing with the Securities and Exchange Commission. And he received $17,150 in his 401(k) plan, unchanged from the 2011 fiscal year.

Nelms, 52, has been CEO since 2004 and chairman since 2009. He was president and chief operating officer from 1998 to 2004

For the year ended Nov. 30, Discover, which also has banking operations and offers student loans, earned $2.34 billion, up 5.3 percent from the year earlier. Revenue, net of interest expense, rose 8.3 percent to $7.65 billion.

According to the SEC filing, the company approved changes to its executive compensation program for 2013 that maintain its "emphasis on pay-for-performance and align with shareholder interests while further strengthening the risk-balancing features of our executive compensation program in a manner consistent with guidance from the Federal Reserve." These new features include lengthening the performance period for performance stock units to three years to better align reward with long-term results.

The AP's formula for calculating executive compensation is designed to isolate the value that the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation 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, making the AP total different in most cases than the total reported by companies to the SEC.