by Gwen Moritz
Posted 8/15/2011 12:00 am
Updated 11 months ago
2010 wasn't a great year for Arkansas' publicly traded companies: Seven of 18 reported net losses in their most recently completed fiscal years.
But last year was a good time to be running one of those companies, with total compensation rising for 65 of 88 of the executives named in annual corporate proxy statements and exercising stock options more likely to be part of the mix.
As is fitting, the CEO of the largest company in Arkansas - and the world - was the highest paid executive in the state. Michael T. Duke received a total compensation package from Wal-Mart Stores Inc. of $18.7 million, down 3.5 percent from 2009 entirely because his performance pay and stock and options awards were cut by almost $1 million.
Two other Arkansas executives had total pay packages that reached eight figures last year: David M. Wood, CEO of Murphy Oil Corp. of El Dorado, with $14.1 million and Jeffery R. Gardner, CEO of Windstream Corp. of Little Rock, whose compensation nearly doubled to $10.4 million thanks to more than $3 million realized from exercising stock options.
Almost half the executives on the list, 43, were paid at least $1 million last year.
Arkansas Business' annual list of public companies' executive compensation, which appears on Pages 13-16, uses a simple formula for arriving at total compensation: all compensation reported in the annual proxy, plus the actual value realized from the exercise of stock options during the year. Thirty-eight percent of the executives on this year's list exercised options in 2010, compared with 27 percent in 2009
This year's list is significantly shorter than last year's, just 88 names compared with 99, thanks primarily to the disappearance of two publicly traded companies: the tiny penny stock WellQuest Medical & Wellness Corp. of Bentonville and Baldor Electric Co. of Fort Smith. WellQuest began trading publicly in April 2009 and ceased reporting to the Securities & Exchange Commission a year later. Baldor was acquired by Swiss giant ABB Ltd. in January and did not subsequently file a proxy statement.
In keeping with the SEC's efforts to make executive pay reporting more uniform and transparent, corporate proxy statements include detailed breakdowns of the top managers referred to as "named executive officers."
Most companies include five NEOs, but some (including America's Car-Mart Inc. of Bentonville and Harrison-based First Federal Bancshares of Arkansas) only report three. Mid-year personnel changes can result in more than five being included in the reporting, as is the case with Acxiom Corp. of Little Rock and Arkansas Best Corp. of Fort Smith.
Arkansas Business' list includes all NEOs of Arkansas-based companies, even executives who don't actually live in Arkansas, like Teodor Klowan Jr. of Rochester, N.Y., the chief financial officer of ThermoEnergy Corp.
The list has traditionally included Arkansas residents who are NEOs of companies headquartered outside Arkansas. Only one of those appears this year: Jeffrey Fox, the former Alltel Corp. executive who is now CEO and president of Convergys Corp. of Cincinnati. (He comes in at No. 19 with total compensation of almost $3.8 million.)
Out With the Old
Turnover among NEOs has accelerated in the past couple of years, with a number of longtime fixtures on the list disappearing. In fact, six of last year's top 25 are gone, including Claiborne Deming and Harvey Doerr of Murphy Oil and Richard L. Bond, the former CEO of Tyson Foods Inc.
Several more are already gone from their companies, although they appeared in the proxy and are on our list. That number includes John A. Meyer, who resigned as CEO of Acxiom in March; Steven A. Cossé, who retired as general counsel for Murphy Oil in March; Kirk Thompson, who retired as CEO of J.B. Hunt Transport Services Inc. of Lowell at the end of 2010; and Thomas M. Schoewe, the former CFO of Wal-Mart who retired in January.
Brian C. Cornell, who was No. 2 on last year's list with total 2009 compensation of $14.3 million, is missing this year. He is still a Wal-Mart EVP running the Sam's Club division, but he was only an NEO in last year's proxy thanks to the $10.57 million worth of stock that Wal-Mart used to lure him away from Michael's Stores Inc. in April 2009.
In With the New
Eleven names on this year's list are new since last year, although one of them, Jeff Fox, was on the list in past years as an NEO for Alltel Corp.
The highest-paid newcomer is No. 8, Charles M. Holley Jr., who replaced Schoewe as Wal-Mart's chief financial officer. The other newbies are:
- Donnie King and Noel W. White, senior group vice presidents for Tyson Foods;
- Cynthia Nash, chief information officer for Windstream;
- Three at Arkansas Best - Senior VP J. Lavon Morton, CFO Michael E. Newcity and VP and Treasurer Donald W. Pearson;
- Byrom L. Walker, controller for Deltic Timber Corp. of El Dorado;
- Michael R. Weindel Jr., a vice president at USA Truck Inc. of Van Buren; and
- Lance K. Stewart, CFO for P.A.M. Transportation Services Inc. of Tontitown.