Much about this year’s rankings of public companies and their highest-paid executives by total compensation is typical. It is, for instance, the 10th year a Walmart Inc. executive has been the highest paid.
But there is something new this year: data on the median employee compensation of most of the state’s publicly traded companies.
The roster of public companies and executives is also shorter following the merger early this year of Deltic Timber Corp. of El Dorado into PotlatchDeltic of Spokane, Washington.
Three more companies are making their final appearance in our public company research. LiveRamp Holdings Inc., the renamed remains of Acxiom Corp., has relocated its headquarters from Conway to San Francisco; Bear State Financial Inc. of Little Rock was acquired by privately held Arvest Bank of Fayetteville in April; and Inuvo Inc. of Little Rock is being acquired by ConversionPoint Technologies Inc. of Newport Beach, California, in the first quarter of 2019.
That Doug McMillon, CEO of Wal-Mart, was the highest paid executive is fitting. The Bentonville retailer is the largest company in the world ranked by revenue, which, for the first time, topped $500 billion in the fiscal year that ended Jan. 31.
It is not the largest by profitability — it came in at No. 20 in a ranking led by Apple Inc. Still, the $9.86 billion Walmart cleared last fiscal year was more than five times the 2017 profit posted by the second most profitable company headquartered in Arkansas: Tyson Foods Inc. of Springdale.
Both the list of public company financial performance and the list of executives ranked by compensation are compiled using information reported to the U.S. Securities & Exchange Commission in annual reports and proxy statements.
Proxy statements typically list compensation for five “named executive officers,” but some companies report fewer and some more, especially if there has been turnover in upper management during the fiscal year.
Dillard’s Inc., the Little Rock department store chain, reported a complete compensation breakdown for six named executives, including four members of the Dillard family and the “co-principal financial officers.” It also includes compensation information for five more members of the Dillard family who are employed by the company. All 11 are ranked on the list.
Arkansas Business’ list breaks down total compensation into salary, the calculated value of stock and stock options awarded, bonuses or other cash performance pay, plus any other compensation reported to the SEC.
Any value realized from exercising stock options is noted in the list but is not included in total compensation. If it were, the $82.7 million that Donnie Smith, who was replaced as CEO of Tyson Foods at the end of 2016, realized from exercising options would put him at No. 1 with a bullet rather than at No. 16. (Tyson’s fiscal 2017 started on Oct. 2, 2016. Its annual report for 2018 was issued last week, after the list for this issue was completed, but no new proxy statement has been issued.)
Walmart’s five named executives occupied half of the slots in the top 10, with three more filled by Tyson executives (including another former CEO, Tom Hayes, who was replaced on Sept. 30).
The other two spots belong to No. 2 Roger W. Jenkins, CEO of Murphy Oil Corp. of El Dorado, who benefited from $7.5 million worth of stock and options, and George G. Gleason II, chairman and CEO of Bank OZK of Little Rock, which was known as Bank of the Ozarks until July.
After years of wrangling and objections, most public companies reported a new SEC-required metric in their proxy statements this year. It is the ratio of the CEO’s compensation to the median compensation for all other employees.
The ratios themselves — 1,188-to-1 in the case of Walmart CEO McMillion — are less useful than the median employee pay figures that are revealed for the first time and included in the far right column of the executive compensation list.
In May, after the first wave of proxies reporting the ratio were filed with the SEC, the board of director consulting firm Equilar noted that the median employee compensation data also allowed pay comparisons between companies in the same industry.
“Prior to proxy statements for fiscal year 2017 being filed, many expected the consumer goods and services sectors to have the highest CEO pay ratios, due to the fact that a large portion of the workforces in these two sectors are often part-time employees,” Equilar reported. “The actual disclosures confirmed this suspicion, as the CEO pay ratios for consumer goods and services sectors were higher compared to other sectors at 142:1 and 127:1 respectively.”
As the chart below shows, Arkansas’ publicly traded retailers reported the lowest median employee pay: Dillard’s, $22,316; Wal-Mart, which was allowed to omit certain foreign salaries from its calculation, $19,177; and Murphy USA, which described its median employee as a “part-time store employee,” $16,831.
The highest median pay of $115,353 was reported by Murphy Oil. Second-highest was the $95,518 reported by ArcBest Corp., the Fort Smith trucking company that employs Teamsters union drivers.
2017 Compensation for CEOs and Median Employees
|COMPANY||CEO||2017 COMPENSATION||MEDIAN EMPLOYEE|
|America's Car-Mart Inc.
|Jeffrey A. Williams||$438,008||$43,684|
|Judy R. McReynolds||$2,126,065||$95,518|
|George G. Gleason II||$6,894,835||$39,626|
|Bear State Financial Inc.*||J. Matthew Machen||$430,464||$32,972|
|William T. Dillard II||$4,788,505||$22,316|
|Home BancShares Inc.
|C. Randall Sims||$339,165||$33,599|
|Richard K. Howe||$1,117,975||NA|
|J.B. Hunt Transport Services Inc.
|John N. Roberts||$859,252||$57,384|
|LiveRamp Holdings Inc.
|Scott E. Howe||$5,447,269||$92,118|
|Murphy Oil Corp.
|Roger W. Jenkins||$12,990,075||$115,353|
|Murphy USA Inc.
|R. Andrew Clyde||$5,777,908||$16,831|
|P.A.M. Transport Inc.
|Daniel P. Cushman||$2,457,154||NA|
|Simmons First National Corp.
|George A. Makris Jr.||$2,293,835||$45,834|
|Tyson Foods Inc.
|Thomas P. Hayes##||$8,905,623||NA|
|Uniti Group Inc.
|Kenneth A. Gunderman||$5,425,302||$75,448|
|USA Truck Inc.
|James D. Reed||$1,039,205||$37,468|
|Windstream Holdings Inc.
|Anthony W. "Tony" Thomas||$5,434,988||$74,683|
*Acquired by privately held Arvest Bank on April 20, 2018
**Acquisition by privately held ConversionPoint Technologies Inc. of Newport Beach, CA, expected to close in first quarter of 2019
#Formerly Acxiom Corp.; headquarters relocated from Conway in October 2018
##Succeeded by Noel W. White on Sept. 30, 2018
NA: Median employee compendation not reported, either because the company has not issued a proxy statement since the requirement took effect (Tyson Foods) or is a “smaller reporting company” exempt from the requirement (Inuvo and P.A.M. Transport)
Source: U.S. Securities & Exchange Commission filings