Dillard Siblings Realize $100 Million From Stock Options in 2012

by Mark Friedman  on Friday, Apr. 5, 2013 5:31 pm  

Four members of the family that controls Dillard's Inc. realized nearly $100 million from stock options in 2012.

CEO William Dillard II received $31.1 million in 2012 from exercising 500,000 shares of the company's stock, according to the company's annual proxy statement filed Friday with the U.S. Securities & Exchange Commission.

Dillard's brother, Alex Dillard, who is the president of the retail chain, also received $31.1 million in 2012 from exercising 500,000 shares of the company's stock.

Brother Mike Dillard and sister Drue Matheny, executive vice presidents, each realized $18.8 million by exercising options.

Just three and a half years ago, when Arkansas Business published its annual "top stockholders" list in September 2009, the combined stockholdings of the entire Dillard family was estimated at $72 million. By last October, it was above $530 million.

Dillard's also set its date for its annual meeting at 9:30 a.m. on May 18 at its company's headquarters, according to the proxy.

Reynie Rutledge, 63, the chairman of First Security Bancorp of Searcy, has been nominated to replace R. Brad Martin, who announced on Wednesday that he will not seek re-election to the board of directors. Rutledge would represent holders of publicly traded Class A shares.

Shareholders will vote on re-electing three other Class A board members and approve the accounting firm KPMG LLP for fiscal 2013. The board, though, is controlled by the Dillard family members under a dual-class stock arrangement. Class A stock is traded on the New York Stock Exchange, but holders of the Class B shares, owned almost exclusively by CEO Dillard and his family members, have the right to choose eight of the 12 corporate directors.

The company's proxy statement revealed slight pay increases for the top executives:

  • William Dillard's total compensation in 2012 was $4.9 million, down from $11.8 million in 2011. His base salary increased from $900,000 to $950,000 in 2012. The bulk of the compensation decrease came from a $275,760 drop in pension value. His pension value had increased $6.8 million in 2011.
  • Alex Dillard's total compensation also fell from $12.7 million in 2011 to $4.8 million. His base salary, though, increased to $920,000 in 2012, up from $870,000 in 2010.
  • Mike Dillard's base pay increased to $675,000 in 2011, up from $650,000 in 2011. His total compensation in 2012 was $2.5 million, down from $6.1 million in 2011.
  • Matheny saw her salary increase by $55,000 in 2012 to $675,000. Her total compensation, though, fell 70 percent to $2.3 million. Still, She also received an additional $18.8 million when she exercised nearly 300,000 shares of the company's stock.
  • CFO James Freeman received a pay raise of $35,000 in 2012 and made $710,000. His total compensation remained fairly stable at $5.17 million in 2012, which was only a slight increase from 2011. He realized $18 million by exercising 300,000 shares of the company's stock in 2012.
  • Denise Mahaffy, a vice president of the company and another sister of Dillards, received a salary and bonus of $650,000, up from $550,000 in 2011. The company made a $59,692 contribution to her benefit plan.
  • Also Bill Dillard's son, William Dillard III, a vice president of the company, received a salary and bonus of $650,000. In 2011, the company paid him $570,000. The company also made a $60,700 contribution to his benefit plan.
  • Alex Dillard's daughter, Alexandra Dillard, works at the company as a divisional merchandise manger. She made $190,000 in 2012, up from $147,500 in 2011. The company made a $14,203 contribution to her benefit plan.

For the fiscal year that ended Feb. 2, Dillard's revenue was $6.6 billion compared with $6.3 billion a year earlier. Its net income climbed to $479.75 million over $396.7 million in previous year.

 

 

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