The number of Inland Northwest-based publicly traded companies is shrinking, but for the executives at the corporations that remain, total compensation grew substantially in 2014, the Journal of Business annual analysis shows.
Average total compensation for the 49 executives from 11 public companies in the Inland Northwest was $1.35 million in 2014. That’s up 9 percent from $1.23 million in 2013 for the same group of executives, according to the analysis, which is conducted using information those companies must disclose to the U.S. Securities and Exchange Commission in annual proxy statements.
The increase in average compensation follows a year in which compensation remained essentially flat. In 2013, total pay ticked downward 0.2 percent. That leveling followed three consecutive years of double-digit growth, with average annual increases of 13.2 percent in 2012, 13.3 percent in 2011, and 17.9 percent in 2010.
Along with an increase in average pay, the number of executives with total compensation exceeding $1 million rose substantially. In 2014, 23 Inland Northwest executives had more than $1 million in compensation, up from 15 the previous year.
That said, about 30 percent of the named executive officers included in the analysis saw their income drop. Eight newcomers to the list didn’t have comparable data from 2013.
The top-paid executive, Avista Corp. Chairman, President and CEO Scott L. Morris, made about $5.5 million in 2014.
That outpaced the top-paid executive the previous year, Clearwater Paper Corp. President and CEO Linda K. Massman, who brought in $4.8 million in 2013.
Morris, who finished fifth on the 2013 list, had an 88 percent increase in total compensation. While his salary and bonus rose, more than two-thirds of the increase in his compensation came from pension plan changes.
All five of Avista’s named executive officers had surges in total compensation in 2014 compared with the previous year, with individual’s percentage increases in compensation ranging from 52 percent to 78 percent. All five finished among the top 15 highest paid overall.
Massman had about $4.6 million in total 2014 compensation, which is down about 5 percent from 2013. Despite the decrease, Massman ranked second overall and first among women.
Six women appeared in the top 30, and a total of 10 are among the 49 named executive officers.
That gives women a slightly improved presence in executive ranks when compared with the previous year, when nine of the 55 executives were female.
For the Journal’s analysis, total compensation for executives at publicly traded companies is placed in five general categories: salary, bonuses and incentive pay, stock and option awards, pension plan changes, and other compensation.
Consequently, total compensation for executives typically is substantially more than they took home. For example, amounts listed for grants of restricted stock and stock options use formulas to determine what the stock could be worth in the future for the executive.
The SEC approved rules in the mid-2000s that require companies to divulge more information about the compensation packages provided to their top executives, but they also include estimates of what some forms of compensation are worth—or will be worth in the future.
The Journal doesn’t include in the analysis the gains that executives earn in a single year from having past restricted stock vest or from exercising past stock options. By adhering to more stringent SEC disclosure rules, companies now include the current-year cost of such gains in their filing, so adding them in could be duplicative.
Average annual salaries and bonuses grew at a slower rate than total compensation, increasing 6 percent to $675,000 in 2014 compared with $638,000 the previous year.
In 2013, despite a leveling of total compensation growth, average salaries and bonuses increased 13.5 percent.
Revett Minerals Inc., a Spokane Valley-based company that another publically traded mining company, Hecla Mining Inc., acquired, is the only company with executives included in the 2013 analysis that isn’t in the 2014 data.
The loss of Revett, one of the smaller companies in the analysis, comes a year after three larger players fell off the list for different reasons.
In 2013, Coeur Mining Inc. moved its headquarters to Chicago from Coeur d’Alene. In spring 2014, Portland-based Umpqua Bank acquired Spokane-based Sterling Financial Corp. Around the same time, Sandpoint-based Coldwater Creek Inc. filed for Chapter 11 bankruptcy.
Executives from Ambassadors Group Inc., a Spokane-based company that offers student travel programs, are included in the 2014 data.
That company, however, has announced plans to discontinue operations at the end of this year, so the number of publicly traded companies could dwindle further.
While the number of companies on the list is changing, one aspect that has remained steady is the top five highest-paid executives.
After Morris and Massman, Phillips S. Baker Jr., president and CEO of Hecla, ranked third with $4.5 million in total compensation, up 17 percent compared with a year earlier. Itron President and CEO Philip Mezey, at fourth, had $3.8 million in total pay, and Michael J. Covey came in at fifth with $3.7 million. Mezey’s compensation increased 22.5 percent, and Covey’s pay dipped about 11 percent.
Among executives who didn’t carry a CEO title, Hecla Mining Senior Vice President and CFO James A. Sabala ranked highest, with $2.5 million in total compensation.
Newcomers to the highest-paid executive list include Ambassadors Group President and CEO Philip B. Livingston, who finished 19th with $1.3 million in total compensation; Itron Senior Vice President of Human Resources Michel Cadieux, 24th with $929,000; Red Lion Hotels Corp. President and CEO Gregory T. Mount, 26th with $891,000; and Itron CFO W. Mark Schmitz, 30th at $755,000.
To access a PDF of the whole list click here
1 Amounts can include compensation voluntarily deferred by an executive under a company
2 Includes amounts listed either as bonus or as other annual incentive pay.
3 Under SEC rules, these amounts generally represent the company’s fiscal 2013 expense for
restricted stock and stock-option grants made to an executive. They don’t necessarily reflect
the actual value an executive might ultimately receive from the awards.
4 Other compensation can include other long-term incentive payouts, directors’ fees,
pension-plan value changes, and other miscellaneous compensation, including perks.
5 Steve Helmbrecht served as CFO through August 2014 and remained with Itron as vice
president of finance through the end of the year.
6 Key Tronic figures are from fiscal year 2015, which ended July 27, 2015.
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