Toll Brothers chief defends his pay packages

By Martha Graybow

NEW YORK (Reuters) - Home-building executive Robert Toll, who has been one of the best-paid U.S. CEOs, said on Wednesday he believes his compensation payouts in recent years have been well earned.

The chief executive of Toll Brothers Inc (TOL.N: Quote, Profile, Research, Stock Buzz) and other heads of publicly traded home-builders have been criticized by activist investors for earning excessive pay during the housing boom and not seeing sharp enough pay cuts as the real estate market has soured.

Asked at the Reuters Housing Summit if he thought his pay packages had been fair, Toll said, "I do." He also said that he did not earn a bonus for fiscal 2007 and that the company has restructured his bonus plan for this year so it is "easier to follow" and has fewer "bells or whistles" than in the past.

Toll was awarded $7.1 million in total compensation in the year ended October 31, according to the company's latest proxy filing with the U.S Securities and Exchange Commission.

That included $1.3 million in salary, about $95,000 in other compensation and almost $5.7 million worth of stock options, which are currently underwater based on the company's stock price. The exercise price of the options was $31.82, while the stock closed on Wednesday at $21.51.

In fiscal 2006, Toll received $18.8 million in salary and bonus alone. His total payouts during the 2002-to-2005 period added up to $92.3 million, based on salary, bonuses and non-equity incentives but not including extras like stock awards, according to compensation services firm Salary.com Inc.

At the Reuters summit, Toll said he does not back the idea of giving shareholders an advisory vote on executive compensation, a hot issue among activist shareholders throughout corporate America.

"I wouldn't support that any more than I would support the shareholders coming in and running the company ... " he said. "It's so easy to sell your shares versus joining our compensation committee."

Toll, who is in his late 60s, also said he has no immediate plans to step down from the company he co-founded with his brother, Vice Chairman Bruce Toll. He said there were several younger company executives who would be capable of taking over when the time comes for new leaders.

"There are a couple of guys that can probably do it better than I can do it and maybe I should get out of the way and give them a seat," he said, "but I'm not ready to do that yet."

(Reporting by Martha Graybow)