Pay Soars for Dillard's Executives As Stock Value Rises

by Jan Cottingham  on Monday, Aug. 20, 2012 12:00 am  

  • Duke's compensation slipped in 2011, falling to $18.3 million compared with $18.7 million in 2010.
  • The list features 15 new names. Among them are Neil Ashe, EVP of Bentonville-based Wal-Mart; John Roberts III, president and CEO of J.B. Hunt Transport Inc. of Lowell; and Scott Howe, CEO and president of Acxiom Corp. of Little Rock.
  • More than half - 43 - of the 74 who were on the list both years saw total compensation rise.
  • Thirty-three of the executives exercised stock options.
  • This year's list is down by one public company, ThermoEnergy Corp., a wastewater treatment and power generation technology firm that moved its corporate headquarters from Little Rock to Massachusetts.
  • The list features a number of executives who have since left their companies, including three with Acxiom. They are John Adams, former chief operating officer and executive vice president; Shawn Donovan, a former EVP; and Christopher Wolf, former CFO and EVP. Scott Howe, named Acxiom CEO in July 2011, made the list with total compensation of $6.1 million.
  • Another high-profile departure was David Wood, who resigned as CEO and president of Murphy Oil Corp. of El Dorado in June. He was No. 4 on the list with $13.7 million in pay.

The big bump in Dillard's executives' pay came primarily in the form of "other compensation" and in the exercise of stock options. In the retailer's case, the increase in Dillard's pension value accounted for most of the other compensation. For example,

Alex Dillard's other compensation totaled $8 million, of which $7.8 million was the improved pension value. Dillard also realized $3.7 million in the sale of his company's stock.

Josh Henke is managing director of Longnecker & Associates of Houston, an executive compensation and corporate governance consulting firm. The Dillard's surge in pay didn't surprise him. Improved company performance justifies a hearty compensation package, he said.

"If they're performing and they're returning it back to shareholders, [the pay package] works well on the upswing," Henke said. "The true story is, how does it work on a downswing? ... If they're not returning that value to shareholders in a downturn, are they going to have the reciprocal reaction to that?

"That's the true telling if a compensation package is set up for true pay for performance."

Dillard's stock rose 18.3 percent in 2011 to close at $44.88. It has performed even better so far in 2012, rising 68.4 percent to close at $74.19  on Wednesday.

That strong showing, should it continue, may mean even bigger paydays for the Dillard family next year and has the potential to push one of them to the top of the executive compensation list.

Looking Nationwide

2011 was a good year for CEOs throughout the United States, according to the Associated Press. The AP reported in May that CEO pay had risen 6 percent compared with the prior year.

The AP, using a somewhat different definition of total compensation, analyzed 322 companies in the Standard & Poor's 500 and used data from Equilar, an executive compensation consulting firm. Median CEO pay was $9.6 million in 2011, the AP said.

In June, The New York Times, also using Equilar data, published its own analysis of executive pay at the nation's largest corporations.

The top executive on The Times list was Timothy Cook of Apple, who made $378 million in 2011. The only Arkansas CEO on the list was Wal-Mart's Duke.

(To read about efforts to ensure management at public companies is held accountable, click here.)

 

 

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