Reynolds' Ivey Made $16.2 Million in 2009

Reynolds American Inc. CEO Susan M. Ivey made $16.2 million last year, about 84 percent more than the previous year as the nation's second-biggest tobacco company struggled with declines in cigarette demand, according to a calculation by The Associated Press based on government filings.

Last year, the maker of Camel and Pall Mall cigarettes, and Kodiak and Grizzly smokeless tobacco saw its profit fall about 28 percent as revenue fell by 4.8 percent. The cigarette maker raised prices to offset sales volume declines it blamed on the economy and a 62-cents-per-pack federal tax increase that began in April.

For the year, Reynolds American said cigarette volumes fell 8.7 percent, while the company estimates an industry overall decline of 8.6 percent.

More than half of Ivey's pay package was accounted for in $8.5 million for a performance-based incentive bonus for 2009 and cash settlement of a 2007 long-term incentive plan. Her salary grew about 1 percent to $1.3 million.

The value of her stock options and stock awards nearly tripled to $6.2 million.


Ivey, who has headed the company since January 2004, was also given other compensation worth $198,217, which included a $79,000 payment given in place of the company's old executive perks program and personal flights on company-owned planes valued at about $11,500.

In 2008, Ivey's compensation was valued at $8.8 million.

Reynolds American also announced that it will hold its annual shareholders meeting on May 7 at its Winston-Salem, N.C., headquarters.

The Associated Press formula is designed to isolate the value 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 Securities and Exchange Commission.

Moldovan Communist Head Accuses Premier Of Cigarette Smuggling

The leader of Moldova's opposition Communist Party has accused Prime Minister Vlad Filat of smuggling cigarettes into neighboring Romania to pay for his election campaign last year, RFE/RL's Moldovan Service reports.

Former President Vladimir Voronin told a press conference in Chisinau that Filat's campaign funds were provided by Dinu Patriciu, a Romanian oil tycoon who is on this year's "Forbes" list of the world's wealthiest persons.

Voronin said Patriciu asked Filat last month to repay the money. He said Filat then prepared 10 truckloads of cigarettes to be sent to Romania. Voronin said only two trucks made it over the border while a third was stopped by Romanian customs officials. He did not say what happened to the other trucks.

Filat called Voronin's allegations "rubbish" and said he has no time to respond to such things.

Patriciu told the Romanian media that he has no ties whatsoever with Filat and did not finance his campaign.

Evans cigar shop owner blazing over possible cigarette tax increase

EVANS, Ga. - Smokers could cough up more to help ease Georgia and South Carolina's struggling budgets.Tuesday, opponents of Georgia's possible cigarette tax hike were at the state Capitol.

Although Georgia and South Carolina are among the cheapest when it comes to cigarettes, smokers and business owners say a tax increase is not what's needed to help with the budget shortfall.

Advocates of a new cigarette tax say an extra buck tacked on could raise as much as $354 million for the state of Georgia and decrease the number of smokers.

Russell Wilder with Top Shelf Cigar and Tobacco in Evans disagrees.

"They've realized over the years that they can keep raising the taxes and people will keep smoking," said Wilder.

Wilder says an extra dollar added to the price will do nothing but send customers over the river to shop.

"The potential there is I won't need to carry this anymore because people are taking the 15 minute drive over to North Augusta and buy their cigarettes there,” said Wilder.

That’s something Wilder says he can't afford.

"It's a small segment of what I sell but it's enough to pay my utilities. Now where am I going to make up that difference in sales,” asked Wilder.

We asked nonsmokers their opinion on the tax increase.

"That's fine with me because I don't smoke. It doesn't really matter," said one nonsmoker.

Although it matters to Wilder, he says if the tax goes into effect...

"We're 25 percent of the voting population so we can't vote anybody out. All we can do is be mad," said Wilder.

In South Carolina, School Superintendent Jim Rex wants the state's current 7 cent per pack tax raised to the national average.

He says the move would avoid teacher furloughs.

Don't divert tobacco fund

An ounce of prevention is worth a pound of cure. Apply Benjamin Franklin's truism to state tobacco prevention efforts, and it can be said that an annual $3 million of prevention is worth $50 million of cure. Preserve funds for tobacco prevention and control as a necessary investment against costly tobacco ailments down the road.

As it is, just 6.5 percent of tobacco settlement money now goes into the Hawaii Tobacco Prevention and Control Trust Fund: That's $3.2 million this year, down from $10 million yearly from 1999 through 2001. The Legislature diverts heftier chunks of the fund to other purposes, such as 28 percent to the University of Hawaii's new medical school and 25.5 percent to the state general fund through 2015. Despite overwhelming public testimony, House Bill 2887 moving through this Legislature aims to totally raid the tobacco-control portion through 2015 to boost the anemic general fund.

"I know the budget is tight right now ... but every dollar we spend on prevention saves so much more in health care costs," Dr. Elizabeth Tam, the trust fund's advisory board chairwoman and head of the Department of Medicine at the UH John A. Burns School of Medicine, told the Star-Bulletin's Helen Altonn.

"A Decade of Saving Money, Saving Lives" is a recent report that says the fund is making a "tremendous impact" in preventing smoking and helping people quit. "In the last six years alone, the decrease in smoking prevalence has saved 14,000 lives," it said.

The Coalition for a Tobacco Free Hawaii agrees on the strides.

"We saved lives and saved state money. We saved over $400 million in direct health-related costs over eight years attributed to smoking," said Trisha Nakamura, the group's policy and advocacy director.

But a decade of progress is in jeopardy: Smoking and tobacco consumption have increased in states where tobacco control funding has been cut.

A 2009 report by the U.S. Centers for Disease Control and Prevention showed that while U.S. smoking death rates have plunged, states with the highest smoking rates have the highest death rates from smoking. Hawaii, encouragingly, was at the bottom of that list with Utah, with the lowest death rates due to smoking.

A key is prevention among the young. The tobacco-free coalition says 1,400 kids start smoking every year -- but that strides have been made in reducing youth smoking from one in four youths, to one in 10.

On Wednesday's 7th annual Kick Butts Day rally at the state Capitol, hundreds protested the anti-smoking fund raid, noting that the tobacco and alcohol industries outspend prevention and counter-marketing efforts by millions of dollars each year, making it increasingly difficult to combat the negative effects of their marketing on youth.

As state lawmakers rattle coffers to meet a $1.2 billion shortfall, successful programs risk being depleted. Yes, these are tough financial times. But an investment of $3 million annually to head off $50 million in smoking-related costs seems well worth it -- in dollars and cents, and in lives saved and better lived.

Tobacco Seen As Harmful In Any Form

Back in medical school, we were told about the dangers of cigarette smoking but pipe and cigar smoke were seen as less harmful.

According to a new study in the journal Nature, pipe and cigar smoke may be more harmful than once thought.

Researchers conducted a study to determine whether pipe and cigar smoking was associated with elevated levels of cotinine--the end product of tobacco which can be detected in the urine.

They also looked at airflow to evaluate lung function. Those who did not smoke cigarettes but did smoke pipes or cigars were more likely to have airflow obstruction than those who had never smoked.

Clearly there is no free ride.

Celanese Counts On Cigarette Smoking, Soda Drinking To Raise Earnings

Celanese Corp. (CE), a Dallas chemical company, is counting on a rebound in cigarette smoking and soda-pop drinking to drive its earnings higher in 2011 and 2012.
As part of its consumer specialty segment, Celanese manufactures a sweetener for soft drinks and a product that is used for cigarettes filters. Its customers include Altria Group Inc. (MO), its Philip Morris International (PM) spin-off, and PepsiCo Corp. (PEP)."These tend to go into decline later in the cycle. We think that demand has bottomed out," Dave Weidman, chief executive and chairman of Celanese said in an interview Tuesday. But he was cautious about seeing any improvement for 2010, instead forecasting increases in the next two to three years.
Celanese swung to a small fourth-quarter profit Tuesday and topped analyst expectations. But the consumer specialty segment, what Weidman describes as a " late-cycle business," saw a volume decline because of soft demand for cigarettes and soft-drinks in global recession.
In January, Altria, the biggest U.S. tobacco producer, reported about a 11% to 12% decline in cigarette volumes in the fourth quarter and has a cautious outlook for the following year. "The business environment for 2010 is likely to remain challenging as many consumers continue to be under economic pressure based on high unemployment," Michael Szymanczyk, chairman and chief executive of Altria, said during an earnings conference call Jan. 28. Pepsi and Philip Morris International are scheduled to report quarterly results Thursday.
Celanese has three business segments that manufacture other chemicals used in paints, textiles and medical devices. The company has more than 30 industrial plants in North America, Europe and Asia.
The $4.2 billion company is "aggressively" pursuing several acquisitions that range in size of a few million dollars to just under $500 million in all three of geographic locations, Weidman said. "We like to stay in businesses that are similar to businesses that we have today," Weidman said. Weidman declined to give a timeline for when any of these deals could close.
Its largest segment by revenue, the acetyl intermediates division, had " significant volume recovery and margin expansion" in the fourth quarter. Its revenue climbed 13% as the segment returned to profitability.
"Much of the beat came from very strong results in the company's core acetyl intermediates business from which the company generates over 50% of its revenues," Hassan Ahmed, an analyst with Alembic Global Advisors in New York, wrote in a note to clients.
Celanese posted earnings of $5 million, or 2 cents a share, compared with a prior-year loss of $155 million, or $1.09 a share.
Excluding impacts such as income-tax gains and provisions, the latest quarter had a 50-cent profit from continuing operations while the year earlier had a 40- cent loss. Revenue rose 7.9% to $1.39 billion on improved demand.
Weidman expects that in the next year Celanese's earnings per share should increase because the company has closed plants in Europe and Mexico meaning it will have lower taxes and less depreciation to report.Shares of Celanese rose 40 cents, or 1.4%, to $29.97.

Wipro Gets Outsourcing Contract From British American Tobacco

Wipro Technologies, the information-technology-services division of India's Wipro Ltd. (507685.BY), said Wednesday it won a multi-year outsourcing contract from British American Tobacco PLC (BTI) to support the tobacco major's global business operations.
The Indian company will provide application-support services to British American Tobacco across more than 130 countries, Wipro said in a statement. 
It didn't mention any financial terms of the contract.