SAN FRANCISCO – Safeway Inc. rewarded its chief executive officer with a 2006 pay package valued at $11.5 million for leading the grocer to its highest profit in five years, according to an analysis of a regulatory filing.

Steve Burd, Safeway's CEO for the past 14 years, received $2.64 million in nonequity incentives to supplement a $1.33 million salary and $212,298 in perquisites, according to documents filed Wednesday with the Securities and Exchange Commission. Most of Burd's perks covered his use of Safeway's corporate jet.

The biggest chunk of Burd's 2006 compensation consisted of stock and options awards valued at $7.28 million on the date of the grant. This included 500,000 shares of restricted stock, valued at $545,000, in Blackhawk Network Holdings Inc., a subsidiary that specializes in stocking the company's stores with gift cards from other merchants.

The Associated Press bases its executive pay totals on salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. These calculations may differ from the figures listed by companies in their proxy statements.

Pleasanton-based Safeway has been on the upswing after struggling through several years of labor strife, bungled acquisitions and cutthroat competition with discount retailers like Wal-Mart Stores Inc. that have been grabbing a larger piece of grocery sales.

The difficulties saddled Safeway with large losses and dragged down the company's stock price, provoking a 2004 revolt among a dissident group of shareholders that tried to oust Burd from Safeway's board.

After thwarting the shareholder challenge, Burd cooked up a new business plan that has changed the look and feel of nearly half of the stores. The makeover is meant to appeal to shoppers looking for more ambiance, choices and personal service than Wal-Mart and other lower-priced merchants offer.

To help keep Safeway's own prices down, Burd also cut the wages and benefits of many store employees – a crusade that sparked an acrimonious labor dispute in Southern California during late 2003 and early 2004. Safeway recently began negotiations on a new Southern California contract.

Burd's strategies helped Safeway earn $870.6 million, it biggest annual profit since 2001.

The performance contributed to a 46 percent increase in Safeway's stock price last year. The grocer's shares, which closed Wednesday at $36.84 on the New York Stock Exchange, still remain well below the highs of early 2001 when they soared above $60.