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This time around, it's not so lonely at the top: 15% more execs at LI's big 100 get paid multimillions(Newsday (Melville, NY) (KRT) Via Thomson Dialog NewsEdge) Jun. 26--Executives receiving multimillion-dollar pay packages have more company. At least 54 executives among Long Island's largest 100 public companies had compensation packages surpassing $2 million last year, up 15 percent from 47 executives in that category the previous year. No Queens executives passed that threshold. Other key findings on the 440 executives in Newsday's annual compensation analysis: Although most top executives fell far short of multimillion-dollar pay packages, half received at least $417,000. The number of executives receiving stock options increased sharply, in contrast to a national downturn in the use of options as companies moved to other rewards more closely linked to performance. Executives at three companies - Cablevision Systems Corp., CA Inc. and North Fork Bancorp - dominated the top 10 list for total pay, which includes salary, bonus and options granted last year. Not all executives had a rosy year, but overall, compensation increased in line with hikes in total pay received by chief executives nationally. On the top 10 list for total pay, compensation ranged from $6.1 million for Russell Artzt, executive vice president at CA, to $22.6 million for Charles Dolan, chairman of Cablevision. Only No. 9, Michael Atieh, executive vice president and chief financial officer at OSI Pharmaceuticals, wasn't employed by one of the big three companies that grabbed the top spots. Batting almost a thousand Dolan also topped the list for the biggest one-year jump in total pay - 989 percent. In fact, this is the third year in a row that four Cablevision executives have made the top 10 list. Dolan's pay wasn't disclosed last year because his $2-million pay package was topped by at least five others at the company. Each year, public companies generally disclose five executives' pay packages - the chief executive and four most highly paid officers who earned more than $100,000 in salary and bonus. Last year, 440 executives at Long Island's largest 100 companies met that requirement, set by the Securities and Exchange Commission. In Queens, five public companies disclosed salaries of 26 executives combined, according to the Newsday survey, based on data from Salary.com, which provides compensation data, applications and services. In addition to revealing compensation of its top five executives, Cablevision also lists salaries and bonuses of six relatives who earned six-figure salaries at the company. Cablevision, which is unique on Long Island as a large public, family-run company with eight relatives in key positions, must reveal the relatives' salaries as part of Securities and Exchange Commission requirements. Company spokesman Charles Schueler said family members have been senior executives since the Dolans founded the company nearly 35 years ago. "Our executive compensation is fully appropriate and reflects Cablevision's excellent operating performance in 2005, while encouraging strong results in the future," he said. The multimillion-dollar compensation packages aren't limited to Long Island's multibillion-dollar companies, or even the profitable ones. Cameron Reid, chief executive of pharmaceuticals company Interpharm Holdings in Hauppauge, took in $2 million in compensation, about 5 percent of the company's $39 million in revenue last fiscal year, when the company had a net loss of $149,000. The company did not respond to requests for comment. Combined, the 440 executives earned $477 million, an average of nearly $1.1 million each. That's up from $431 million in total pay for 451 executives the previous year, an average of $960,000 apiece. The majority of that compensation - 56 percent - went to the fifth of the executives earning more than $2 million. But the multimillion-dollar payouts certainly don't reflect the typical executive pay package locally. Half of the executives took in less than $417,000. A third of the pay overall came from options. Options offer the chance to buy shares at a fixed price after a specified date, and holders can make a profit if the fixed price is lower than the market price when they cash in the options. Though the value of options granted last year held steady from the previous year, executives still have many options from prior years, and they've become quite valuable. A.F. Petrocelli, chairman, president and chief executive at United Capital, a real estate and manufacturing company in Great Neck, stands to gain $52.5million on options he holds, topping the list. Among the three-fifths of executives with potential gains from options, the average paper profit was $2.5 million. These are paper profits because the executives either haven't cashed in the options, or the options haven't yet vested. Option trends diverge Nationally, the use of options is on the decline because companies must now treat the grants as expenses, cutting into corporate profits, compensation experts said. Furthermore, options vest over time and generally aren't tied to performance, so boards of directors have moved away from them. Last year, the number of chief executives receiving options fell 3 percent, and the value of options declined by a median of 4.4 percent, according to an analysis of 350 U.S. chief executives' compensation packages conducted by Mercer Human Resource Consulting, an employee relations and financial services company based in Manhattan. On Long Island, however, the number of executives receiving options soared by 20 percent. That could reflect the age and growth of Long Island companies. Bruce Ellig, an adviser to corporate boards and author of "Complete Guide to Executive Compensation" (McGraw-Hill, $99.99), said executives at early-growth companies are more likely to get options, while mature companies tend to offer restricted stock. Jump in restricted stock A fifth of local executives received restricted stock, which can be yanked back in certain situations, such as if the executive quits or is fired before a certain period. Though small, the number of local executives receiving such stock increased 20 percent - double the national jump. Half of Long Island executives had an increase of 6.9 percent or more in the value of restricted stock, slightly higher than the 5.7-percent median in the Mercer survey. There's room for growth, though. Just a fifth of local companies offer restricted stock. As part of a move toward pay for performance, companies are considering restricted stock that vests upon the achievement of predetermined goals, such as revenue growth, instead of vesting over time, said Diane Doubleday, global leader of Mercer's executive remuneration business. In the national Mercer survey, the median increase in total compensation of 6.6 percent was in line with the median 6.8 percent shareholder return for the companies last year. On Long Island, however, while median executive pay rose by 4.5 percent, the median shareholder return plummeted to a loss of 11 percent. That means that investors would have lost $11 or more last year for each $100 invested in 50 of Long Island's 100 largest public companies. Marjorie Glover, who oversees the executive compensation and employee benefits practice at Chadbourne & Parke, a law firm in Manhattan, said compensation packages at Long Island's smaller companies probably don't receive as much outside scrutiny as those at larger companies, explaining the increase in options and pay hikes that are out of line with total return. The majority of public companies on Long Island have less than $75 million in annual revenue. Bonuses, however, which are based on performance, did remain flat on Long Island, compared with a 10.6 percent increase among chief executives in the Mercer survey. The median executive salary locally rose 4 percent, on par with the 3.6percent increase nationally. It wasn't a rosy year for all executives: Just half of the Long Island executives received an increase in total pay. And, in a reverse of the richest getting richer, three-fifths of the raises went to those on the bottom half of last year's pay scale. During the go-go 1990s, compensation among chief executives across the country sometimes soared by double-digits along with the bull market; but that came to a screeching halt when the bubble burst, said Howard Golden, senior executive compensation consultant at Mercer. In recent years, chief executives nationally have seen 4percent to 6 percent increases in median total compensation, he said. The exception was a 17.1percent jump in 2004. The slowdown in pay hikes nationally comes after years of scrutiny over pay packages. "We know perceptions of excessive compensation have a negative impact on company performance," said Alyssa Ellsworth, managing director of the Council of Institutional Investors, a group of pension funds. "It's a red flag for us as investors that the directors may not be doing their jobs. If the incentives directors are creating are not tied to the long-term performance of the company, then what are they rewarding?" Soon, investors will know a bit more about how executives are being rewarded for their work, information companies are often loath to reveal and do so only because of Securities and Exchange Commission requirements. The agency is overhauling disclosure requirements to make it easier for investors to decipher the exact parameters of executives' pay and perks. "It's awfully tough to argue against a spirit of transparency," said Diane Lerner, a senior consultant at Watson Wyatt Worldwide, a human resources and financial consulting firm. Staff writer Tami Luhby contributed to this story. HIGHEST-PAID EXECUTIVES Rank Company Executive 2005 title Total pay 1 Cablevision Systems Charles Dolan Chairman $22,567,586 2 CA John Swainson* President,CEO 19,834,223 3 North Fork Bancorp John Kanas Chairman, President, CEO 15,382,831 4 Cablevision Systems James Dolan President, CEO 14,541,031 5 North Fork Bankcorp John Bohlsen Vice Chairman 10,820,964 6 Cablevision Systems Thomas Rutledge Chief operating officer 10,360,171 7 Cablevision Systems Hank Ratner Vice chairman 9,987,937 8 CA Kenneth Cron** Former interim CEO 6,663,178 9 OSI Pharmaceuticals Michael Atieh*** Exec. Vice president, Chief financial officer 6,223,651 10 CA Russell Artzt Executive vice president 6,123,907 *Joined in 2004 **Interim CEO for 2004 and part of 2005 *** Joined in 2005 POTENTIAL STOCK OPTIONS GAINS Rank Company Executive 2005 title Potential options gains 1 United Capital A. Petrocelli Chairman, $52,459,078 president, CEO 2 NBTY Scott Rudolph Chairman, CEO 49,695,350 3 Griffon Harvey Blau Chairman, CEO 33,120,000 4 Astoria George Engelke Jr. Chairman, Financial president, CEO 29,408,120 5 Kimco Realty Milton Cooper Chairman, CEO 18,393,316 6 Dealertrack Mark O'Neil Chairman, Holdings president, CEO 16,059,352 7 Comtech Fred Kornberg Chairman, Telecom president, CEO 11,199,330 8 Astoria Executive Financial Monte Redman vice president, CFO 11,192,362 8 Kimco Realty Michael Pappagallo Executive Vice president,CFO 11,125,159 9 Allion Healthcare Michael Moran Chairman, President, CEO 10,044,000 Biggest raises RANK COMPANY EXECUTIVE 2005 1-year change Title in total pay 1 Cablevision Systems Charles Dolan Chairman 989.1% 2 FalconStar Software Bernard Wu Vice President 704.2 3 FalconStar Software Wayne Lam Vice President 641.4 4 Schick Technologies Jeffrey Slovin President, CE 620.6 5 E-Z-Em Anthony Lombardo President, CEO 471.7 6 Hain Celestial Ira Lamel Executive V.P. 430.2 CFO, Treasurer Secretary 7 Schick Technologies Michael Stone Executive V.P. 299.7 8 E-Z-Em Dennis Curtin Senior V.P. 297.0 9 Direct Insite James Cannavino Chief executive 259.1 10 OSI Pharmaceuticals Anker Lundemose* Executive V.P. President-unit, CEO-unit 244.6 *Promoted in 2005 NOTE: Executives who worked partial years, according to the company's proxy, are not included in this list. Female executives RANK COMPANY EXECUTIVE 2005 TITLE TOTAL PAY 1 DHB Industries Dawn Schlegel Chief financial officer $1,383,162 2 Steven Madden Amelia Varela Executive vice pres. 1,266,902 3 Veeco Instruments Jeannine Sargent Executive vice pres. 1,220,863 4 DHB Industries Sandra Hatfield Chief operating officer 975,385 5 Gentiva Health Serv. Mary Morrisey-Gabriel Sr. Vice Pres. 746,550 chief marketing officer Dolan dynasty What the extended family of Cablevision owners made in the company in 2005. Charles Dolan Chairman, director SALARY $1.6 million BONUS $7.1 million TOTAL PAY* $22.6 million Helen Dolan Wife of Charles Not employed by Cablevision Marie Atwood Sister of Helen Not employed by Cablevision Edward Atwood Vice president of multimedia, husband of Marie SALARY $218,034 BONUS $76,000 James Dolan President, CEO, director Son SALARY $1.6 million BONUS $3.5 million TOTAL* $14.5 million Kristin Aigner Dolan Senior vice president, MSG Entertainment, Wife of James SALARY $290,199 BONUS $213,000 Rosemary Aigner Executive secretary Mother of Kristin SALARY $83,066 BONUS $2,197 Patrick Dolan Director, president of News 12 networks Son SALARY $227,700 BONUS $100,000 Thomas Dolan Executive vice president Son SALARY $384,615 BONUS $1,528,464** Deborah Dolan-Sweeney Daughter Not employed by Cablevision Brian Sweeney Director, senior vice president, Husband of Deborah SALARY $555,988 BONUS $346,000 *Includes salary, bonus, long-term incentive plan payments and vlaue of options granted ** Earned in 2004 and paid in 2005 This section was researched and reported by Newsday staff writers Richard J. Dalton Jr. and Tami Luhby with the assistance of Salary.com, which provides compensation data, applications and services. Section editor: Peter Bengelsdorf Business editor: Ben Weller News editor: Judi Yuen Photo editor: Jane Hwang Graphics editor: Andrew Wong Cover illustration: Ned Levine Newsday.com: Bobby Cassidy |