After sharp drop in 2008, CEO pay rebounded last year
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May 01, 2010 1:35 PM
WAYNE HEILMAN
THE GAZETTE
The recession appears to be over, and so is the decline in local CEO pay.
Despite declining revenue and losses at three of four publicly traded Colorado Springs-based companies, CEO pay jumped last year after a sharp decline in 2008, according to proxy statements the companies filed with the Securities and Exchange Commission.
Five men who hold the CEO’s job for the four companies took home $5,213,635 last year in compensation — including salary, bonuses, perquisites and stock awards and options, according to the proxies. That’s up 19.1 percent from $4,377,373 in 2008. Pay for the five CEOs plunged 53.1 percent in 2008 after more than doubling in 2007, mostly from large stock and option awards when the companies were posting better financial results.
The latest totals are a bit misleading at first glance. That’s because Spectranetics CEO Emile Geisenheimer’s 2009 pay was inflated by $1.18 million in stock options that actually were granted in late 2008, but didn’t become effective until six months later, when stockholders approved them. Without those options, which were granted to entice Geisenheimer to become CEO amid a federal investigation into the company, overall pay of the five CEOs last year would have declined 7.8 percent from 2008.
Public companies must spell out executive pay, benefits and so-called golden parachute severance agreements in proxies, which also include agendas for annual stockholders meetings, which begin Thursday with Century Casinos’ stockholders meeting in Vienna.
Geisenheimer pulled down the biggest total paycheck last year — $2.01 million, which in addition to the stock options included $500,000 in salary, $270,000 in bonuses and $66,156 in perquisites and other compensation. Westmoreland Coal CEO Keith Alessi pulled down the biggest salary — $588,461 — and the biggest total bonus — $350,000; Westmoreland’s $443.4 million in revenue last year was more than double the combined revenue of the other three firms.
Ramtron CEO William Staunton took home the least last year — $397,200. That did not include any bonuses, incentive pay, stock awards or stock options, and was down $900,000, or nearly 70?percent, from the previous year. Ramtron imposed across-the-board pay cuts last year, with top executives taking the biggest cuts, as part of a restructuring that included laying off 21 employees. Staunton’s bonus, incentive pay and other compensation all depended on the company meeting financial targets it didn’t hit.
“We saw the economy going south and we still had to fund our foundry (contract manufacturing relationship) with IBM and new products, so the buck stopped here. If we have to cut expenses, we have to start here in the executive suite,” Staunton said. “As far as bonuses and stock options go, the investors always get paid first. If we don’t make the minimum number set by the board, then there is no bonus. That is just fair. To reward executives for not making money is unfathomable to us.”
The top golden parachutes last year went to Century’s co-CEOs, who would have gotten a combined $15.5 million — including three years of pay, three times their annual bonuses and immediate vesting of all stock options — if they lost had their job at the end of last year.
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Contact the writer at 636-0234.
THE DETAILS
Century Casinos
Business: Owns or operates casinos in Cripple Creek; Central City; Calgary and Edmonton, Alberta; Poland; and aboard cruise ships
Annual meeting: Thursday in Vienna, Austria
Co-CEOs: Erwin Haitzmann and Peter Hoetzinger
2009 compensation: $613,829 for Haitzmann, $597,931 for Hoetzinger
2008 compensation: $588,980 for Haitzmann, $572,202 for Hoetzinger
Change: Up 4.2 percent for Haitzmann, up 4.5 percent for Hoetzinger
What contributed to the change: Pay for both declined by less than 1 percent; neither was awarded stock options, but each got a $95,000 bonus instead.
Rationale: Bonuses awarded for selling casinos in South Africa and the Czech Republic that netted the company $49.5 million, which the company used to repay debt in Colorado and acquire its Calgary casino.
Golden parachute: Haitzmann, $8.04 million; Hoetzinger, $7.65?million; includes three years of pay, three times the 2009 bonus, three additional years of consulting payments and immediate vesting of all stock options.
Company financial performance: Revenue fell 6.2 percent to $56.8?million; reversed previous year’s $13.2 million loss to a $11.8?million profit.
Ramtron International
Business: Semiconductors
Annual meeting: May 27 in Colorado Springs
CEO: William Staunton
2009 compensation: $397,200
2008 compensation: $1.31 million
Change: Down 69.6 percent
What contributed to the change: All top executives took 12 percent pay cuts as part of across-the-board pay reductions in a restructuring that included layoffs. No bonus, stock or option awards were made in 2009 to any top executive.
Rationale: No bonus, stock or option awards were made because the minimum profit target set by the board’s compensation committee “was not achievable due to current economic conditions and the performance of the company.”
Golden parachute: The company didn’t provide an estimate of the total value of the package, which includes two years of pay, two times the 2009 bonus or two times the potential bonus and immediate vesting of all stock options.
Company financial performance: Revenue fell 25.2 percent to $47.5?million; lost $5.83 million after making a $3.66 million profit the previous year.
Spectranetics
Business: Manufactures medical lasers
Annual meeting: June 25 in Colorado Springs
CEO: Emile Geisenheimer
2009 compensation: $2.01 million
2008 compensation: $536,658 (includes $388,914 paid to former CEO John Schulte)
Change: More than tripled (up 275.2 percent)
What contributed to the change: Includes options valued at $1.18 million to buy 550,000 shares of company’s stock that were granted when Geisenheimer became CEO in late 2008, but did not become effective until stockholders approved the grant in June. Board members also agreed to pay him more than the previous CEO.
Rationale: Bonus awarded for exceeding revenue goal — company’s revenue was up 10.4 percent to $114.8 million — and a discretionary payment “in recognition of the company’s performance in the midst of extraordinary circumstances,” which included a federal investigation begun under Geisenheimer’s predecessor that he settled on Dec. 30 with a $5?million payment.
Golden parachute: Up to $1.62?million, includes one year of salary if he loses his job for any reason or is forced to resign. All of his stock options would immediately vest if the company is acquired or merged with another firm.
Company financial performance: Revenue rose 10.4 percent to $114.8?million; loss more than tripled to $13.4 million.
Westmoreland Coal
Business: Owns and operates coal mines in Montana, North Dakota and Texas, and a power plant in North Carolina
Annual meeting: May 20 in Colorado Springs
CEO: Keith Alessi
2009 compensation: $1.59?million
2008 compensation: $1.37 million
Change: Up 15.9 percent
What contributed to the change: Salary increased 45.7 percent to $588,461; received $350,000 bonus and stock option awards worth $245,100; incentive pay increased 53 percent to $370,731. Both salary and incentive pay increased because Alessi served as CEO for only four months in 2008. No salary increase was awarded for 2010.
Rationale: Incentive pay increased for meeting 200 percent of his individual goal through leadership during two unscheduled outages at customer facilities, an unscheduled outage at the company’s power plant, controlling costs; meeting goals by negotiating cuts in retiree medical costs and reducing pension costs, managing the company’s liquidity issues and selling off a tax credit at a profit. The bonus was awarded because Alessi “has taken great strides to substantially change our landscape, including standardizing our operations, implementing procedures and controls, reducing corporate overhead, stabilizing cash flow and setting a new, focused strategic vision.”
Golden parachute: Up to $623,125 if fired or $267,300 if he dies while CEO or loses his job from a merger or change in control of the company. Those payments include a year’s pay and immediate vesting of stock options, which at the end of 2009 had no value because the stock was worth less than the option price.
Company financial performance: Revenue fell 13.1 percent to $443.4?million; reduced previous year’s loss by nearly 40 percent to $29.2 million
Sources: Proxy statements filed by companies
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