Forest Equipment 20140519

The CEO of an American timber company gave back stock options worth almost $2 million because he said he didn't deserve it after the stock price declined by 10 per cent. (Jacques Boissinot/Canadian Press)

The CEO of a U.S. timber company didn't think he deserved a bonus worth almost $2 million US in a year in which his company's stock went down, so he gave it back.

Rick Holley, CEO of Plum Creek Timber Co., made headlines this week for revealing in a regulatory filing that he returned 44,445 restricted stock options to the company he runs because he didn't think he deserved them.

Holley was given the options, which would have vested in February 2017, as a reward and incentive for him to stay at the company long term. At current market rates, the options are worth just under $2 million US.

In a filing, Holley revealed that he gave the options back to the company, without the board's approval. Holley has been with the company for 20 years.

"In light of prevailing economic conditions, Mr. Holley elected to return the restricted stock units because he does not believe that he should receive such an award unless Plum Creek’s stockholders see an increase in their investment return," the company said in an 8-K form. "Nonetheless, Mr. Holley remains fully committed to Plum Creek and intends to lead the company through this challenging and prolonged economic cycle."

Plum Creek is a timber REIT that owns almost three million hectares of timberland across 19 states. The company's shares have lost about 10 per cent of their value this year, in a tough environment for the timber industry.

And it's not likely Holley has agreed to work for free. Bloomberg data shows he still owns more than 280,000 shares in the company, worth about $11.7 million. In 2013, he took a salary of $950,000 and earned total compensation of more than $8 million.