The merger of Arvin Industries and Meritor Automotive Inc. last summer meant a $7.7 million payday for V. William Hunt, Arvin’s former president, chief executive officer and chairman of the board and current president and vice chairman of the board of the merged company.

A proxy statement filed by ArvinMeritor in anticipation of the Feb. 14 annual meeting of stockholders details salary and payments to the company’s officers.

A proxy outlines issues to be voted on by shareholders at the annual meeting. For ArvinMeritor this year, those include election of some members of the board of directors and appointment of the company’s auditors.

The meeting will be held at the company’s headquarters in Troy, Mich.

According to the document, in 2000 Hunt received:

l$771,154 in annual salary.

l$21,249 in other annual compensation.

l425,627 stock options including 125,627 issued in connection with the merger.

l$1,163,463 in long-term incentive payments.

l$8,136,734 in other compensation.

The other compensation “includes $7,732,662 paid to Mr. Hunt in connection with the merger and related employer contributions to the Arvin savings and supplemental savings plans.”

Hunt’s total compensation, excluding stock options and restricted stock awards, was $10,091,600 in 2000, up from 1999’s $1,609,684.

Under an employment agreement with Hunt, detailed in the proxy statement, he will be employed in his current position as vice chairman and president until Oct. 21, 2003.

The agreement also indicates the company intends to recommend to the board that Hunt be elected chief executive officer no later than Oct. 1, 2002, and chairman of the board no later than Oct. 1, 2003.

In exchange, Hunt will receive no less than $800,000 per year as a base salary.

According to the proxy, one of the goals of ArvinMeritor’s compensation committee is to “foster the creation of shareowner value through close alignment of the financial interests of executives with those of the company’s shareowners.”

Raghavendra Rau, assistant professor of finance at Purdue University’s Krannert School of Management, has made an extensive study of merging companies and said such compensation agreements are not unusual.

While companies with great growth potential such as Internet startups can offer a lot of stock options to their executives as an incentive, companies in more traditional fields must rely on cash incentives, he said.

In cases where the managers of a company are not going to benefit directly from a merger, a large payment acts as an incentive to look after the shareholders’ interest, Rau said.

“If you are the manager of a company, what incentive do you have to make sure the merger goes through?” he said.

Sam Locricchio, ArvinMeritor’s public relations manager, said the details of the proxy statement were pretty standard and he was not at liberty to discuss Hunt’s compensation.

Hunt was out of the country and could not be reached for comment.

Annual compensation in 2000 for other officers, not including stock options included:

l Larry Yost, chairman and chief executive officer, $2,269,638, up from 1999’s $1,232,879.

l Prakash R. Mulchandani, senior vice president and president of heavy vehicle systems $600,918, down from 1999’s $614,776.

l Terrence E. O’Rourke, vice president and president of light vehicle systems, $865,656, up from 1999’s $294,643.

l Thomas A. Madden, senior vice president and chief financial officer, $979,022, up from 1999’s $520,078.

On Tuesday, ArvinMeritor reported a net income loss of $10 million due largely to restructuring costs. Since Jan. 5, the company has laid off about 120 workers in Columbus.