Armor All Chief Got Incentives Up Front

With executive pay, an incentive is something that stimulates one to take an action, to work harder, to perform well.

Most companies further define incentive pay as something the executive receives after meeting certain goals.

But directors of Armor All Products Corp., the Irvine-based manufacturer and distributor of automotive appearance products, were apparently so enamored of Kenneth M. Evans when they recruited him away from Eastman Kodak last year that they promised him two years of incentive payments--up front.

Evans, Armor All’s president and chief executive since April 15, 1991, received a $250,000 salary in the first year of a three-year contract, plus a onetime signing bonus of $90,000, a grant of 50,000 stock options at the then-market value of $11 per share and the promise--this is the way the proxy statement put it--of “a minimum award under the Corporation’s Short Term Incentive Plan of $100,000 per year for the first two years of the (employment) agreement.”

Evans said the pre-established incentive was a means of matching his compensation at Kodak’s L & F Products subsidiary while tying his pay to performance.

He declined to divulge the exact figure of his annual compensation at Kodak but said the $250,000 base pay and $100,000 incentive in his first year at Armor All is “at least” a match.

Evans has apparently earned the bonus, even if it was spelled out in advance: In the year before he was hired, industry leader Armor All saw its sales drop by 19%, to $133.8 million, while profits plunged 64%, to $6.8 million from $18.8 million.

But in the company’s 1992 fiscal year, which ended March 31, Armor All posted net sales of $145.9 million, a 9% increase, and net earnings of $12.8 million, an 88% increase.