Prudential CEO’s Bonus Doubles on Wells Fargo Deal (Update1)

Prudential Financial Inc., the second-biggest U.S. life insurer, said John Strangfeld’s bonus more than doubled last year, his second as chief executive officer, as the company sold a stake in a brokerage business for $4.5 billion.

Strangfeld, who turned down a bailout from the Troubled Asset Relief Program in June, was awarded a bonus of $8.6 million in 2009, compared with $3.3 million in 2008, the Newark, New Jersey-based insurer said today in a regulatory filing.

Prudential reported its biggest profit as a publicly traded company in the final three months of 2009 on the sale of a stake in a brokerage business to Wells Fargo & Co. The insurer’s 2009 net income of $3.1 billion compares with a $1.1 billion loss in 2008, as the brokerage sale added to a capital cushion amassed last year through debt and equity offerings.

Prudential executives including Strangfeld were given “special one-time cash awards related to” the Wells Fargo transaction, the company said in the filing. Strangfeld, 56, got a payment of $4 million tied to the deal.

Prudential’s 64 percent gain last year in New York Stock Exchange composite trading exceeded the 1.4 percent advance for MetLife Inc., the biggest U.S. life insurer.

Pension, Stock Awards

Strangfeld’s total compensation declined to $18.4 million in 2009 from $21.6 million in 2008, in part because of a smaller gain in his pension value. Strangfeld had a $5.3 million gain in 2008, when he became eligible for retirement, compared with $2.9 million in 2009. His stock awards declined to $3.5 million in 2009 from $7.2 million in 2008 when the award was larger to reflect his promotion to CEO.

The U.S. Securities and Exchange Commission has revised the way companies are required to calculate compensation to weigh more heavily options and grants in the year that they are awarded. Because of the change, some companies’ disclosures this year for 2008 pay may not match what the firms reported previously.

To contact the reporter on this story: Sapna Maheshwari in New York at sapnam@bloomberg.net.