Texas Instruments Chairman Got Pay Cut

Texas Instruments Inc., whose chips power two-thirds of the world’s cell phones, paid Chairman Tom Engibous $2.91 million in 2000, a 17.6% drop from 1999, as the company faces slowing sales from some of its biggest customers.

Engibous, 48, was paid $796,200 in salary, a 6.9% increase, according to a proxy statement filed with the U.S. Securities and Exchange Commission. He received a $1.3-million bonus, down 41% from the previous year, and got $818,556 in insurance, retirement and profit-sharing-plan benefits.

Texas Instruments on Tuesday said first-quarter sales will drop 20% from the fourth quarter, a wider decline than expected, because customers such as Nokia Oyj and Motorola Inc. are canceling orders. The company’s business experienced “rapid deterioration” in the fourth quarter, Chief Financial Officer Bill Aylesworth said last month.

Engibous, who is also Texas Instruments’ chief executive and president, received $3.53 million in total compensation in 1999.

Engibous was also awarded stock options during 2000 to buy 700,000 Texas Instruments shares, a decline from the options to buy 1 million shares that he was awarded in 1999.

The Dallas-based company estimated the options Engibous was awarded in 2000 could be worth as much as $61.6 million if the shares rise 10% annually for 10 years. The options would be worth $24.3 million if shares rise 5% during that time.

Texas Instruments didn’t estimate the value of Engibous’ options on the day the board awarded them--known as present value--as many other companies do. Instead, it disclosed estimates of executives’ potential profits from options, known as realizable value.

The SEC allows companies to provide either value in proxy statements. As a result, compensation figures aren’t entirely comparable from one company to another even if they’re in the same industry.

Companies that choose to disclose realizable value must show how much their executives stand to make if the stock price rises 5% or 10% annually during the period until they’re likely to be exercised.

Engibous made $35.3 million last year from exercising options he received earlier, according to the SEC filing.

Chief Operating Officer Rich Templeton was paid $497,200 in salary in 2000, received a $900,000 bonus, and got $639,096 in insurance, retirement and profit-sharing plan benefits.

Texas Instruments’ shares rose 85 cents to $30 Tuesday. The stock has fallen 37% this year, and 61% in the last 12 months. The shares fell 1.9% in 2000.