Ethan Allen chairman tops salary scorecard
By Larry Thomas -- Furniture Today, August 6, 2006
High Point — Huge gains from the exercise of stock options once again propelled several manufacturing and retail furniture executives to the top tier of industry's compensation list in 2005.
Of the 10 highest-paid executives, eight of them earned their spots due to seven-figure gains (and in one case, an eight-figure gain) through the exercise of options. And of the 19 whose total compensation topped $1 million, only six achieved the figure without exercising options.
Topping the list was Ethan Allen Chairman Farooq Kathwari, whose total compensation of $18,633,795 included $17,056,800 from the exercise of options.
Kathwari was second on the Furniture/Today scorecard list for 2004 with total compensation of $8,236,000. That figure included $6,289,200 from exercising options.
A distant second in 2005 was Richard Rompala, who retired last year as chairman and CEO of coatings producer Valspar. His total compensation of $5,485,659 included $3,687,660 from exercising options.
The next two spots in the compensation derby were retail executives. Howard Lester, chairman and CEO of Pottery Barn parent Williams-Sonoma, totaled $4,676,324, while Wayne Badovinus, former president of Design Within Reach, totaled $3,920,950.
Lester was the highest-paid retail executive for the second year in a row. His 2005 total included $2,642,400 from options and $975,000 as salary.
Badovinus, who resigned Oct. 1, received just $338,200 of that total as salary. The remainder came from exercising options.
The fifth-ranking executive on the compensation scorecard was David Montgomery, executive vice president and president of the international division of Tempur-Pedic, a specialty bedding powerhouse.
Montgomery's total compensation of $3,357,944 included $2,895,878 from exercising options.
The president and CEO of another specialty bedding powerhouse, Select Comfort's Bill McLaughlin, was sixth with a total of $3,127,467. His total included $1,882,871 from exercising options.
In seventh spot was the highest-paid executive who didn't exercise options in 2005, Richard Manoogian, chairman and CEO of Masco.
His total compensation of $3,060,900 included $1.5 million in salary and $1.425 million in bonus — the highest salary and bonus of anyone on the list. Manoogian's various perquisites, which are labeled "other annual compensation" in Masco's proxy statement, include $117,190 for personal use of the company's aircraft.
Manoogian's 2005 bonus was less than half the 2004 figure. However, he topped the 2004 list in total compensation because he exercised options valued at about $11.2 million.
Eighth on the total compensation list in 2005 was Warren "Mickey" Holliman, chairman of Furniture Brands International. His total of $2,720,367 included $1,044,594 from exercising options and $925,000 in salary.
Ninth was another Williams-Sonoma executive, President Laura Alber, who was the highest-paid female at a publicly-held company. Her total of $2,506,149 included $1,637,400 from exercising options and $588,749 in salary.
Rounding out the top 10 was another Masco executive who also did not exercise options during 2005, company president Alan Barry. His total compensation of $1,804,120 included $967,000 in salary and $749,000 in bonus.
The 2005 list showed nine other executives who took home more than $1 million. Topping this group were former Cost Plus chairman Murray Dashe and two Aaron Rents officials, longtime chairman Charles Loudermilk Sr. and William Butler, president of the Aaron's Sales and Lease Ownership division.
Dashe left the company on March 8, 2005 and received $55,288 in salary last year. However, he exercised options valued at $600,738 and took home another $864,712 in salary and bonus that he would have received had he remained on board.
One other retail executive, Pier 1 Imports chairman Marvin Girouard, topped $1 million. His total of $1,166,126 included $1 million in salary and $166,126 in other compensation for perquisites such as club dues, automobile expenses and financial planning services.
Other manufacturing executives topping $1 million were David McIlquham, chairman and CEO of bedding major Sealy Inc.; Tom Foy, president of Furniture Brands International; and Jeff Scheffer, chairman and CEO of Stanley.
In addition, executives of two suppliers made the seven-figure list, Leggett & Platt Chairman Felix Wright and Steven Erdahl, executive vice president of the coatings division at Valspar.
Wright, however, gave up nearly all of his $1,157,999 cash compensation as part of the company's deferred compensation plan (see accompanying story below).
Conversely, the lowest compensation totals belonged to two executives at decorative accessories manufacturer Decorize. President and CEO Stephen Crowder took home $147,157, and Executive Vice President James Parsons got $116,554. Neither man received any bonus or exercised any stock options.
| Salaries, compensation packages for top furniture and bedding industry executives, 2005 | |||||
|---|---|---|---|---|---|
| Executive, company | Salary | Bonus | Other annual income | Options exercised | Total |
| 1. Fiscal year ended Aug., 2005. 2. Fiscal year ended June, 2005. 3. Fiscal year ended April, 2006. 4. Fiscal year ended Oct., 2005. 5. Fiscal year ended May, 2005. |
|||||
| RETAILERS | |||||
| W. Howard Lester, Williams-Sonoma | $975,000 | $731,300 | $327,624 | $2,642,400 | $4,676,324 |
| Wayne Badovinus, Design Within Reach | 338,200 | 0 | 0 | 3,582,750 | 3,920,950 |
| Laura Alber, Williams-Sonoma | 588,749 | 280,000 | 0 | 1,637,400 | 2,506,149 |
| Murray H. Dashe, Cost Plus | 55,288 | 0 | 864,712 | 600,738 | 1,520,738 |
| Marvin J. Girouard, Pier 1 Imports | 1,000,000 | 0 | 166,126 | 0 | 1,166,126 |
| Robert Forbes, Design Within Reach | 250,000 | 0 | 0 | 684,635 | 934,635 |
| Michael J. Allen, Cost Plus | 296,538 | 0 | 0 | 283,196 | 579,734 |
| Gary G. Friedman, Restoration Hardware | 509,615 | 0 | 11,400 | 0 | 521,015 |
| Clarence H. Smith, Haverty Furniture | 420,000 | 80,000 | 3,000 | 0 | 503,000 |
| Clarence H. Ridley, Haverty Furniture | 410,000 | 80,000 | 3,000 | 0 | 493,000 |
| David A. Walker, Pier 1 Imports | 275,000 | 0 | 25,669 | 188,888 | 489,557 |
| Marta H. Benson, Restoration Hardware | 323,636 | 0 | 6,000 | 117,203 | 446,839 |
| Harley J. Greenfield1, Jennifer Convertibles | 386,749 | 4,865 | 0 | 0 | 391,614 |
| Rami Abada1, Jennifer Convertibles | 367,288 | 4,865 | 0 | 0 | 372,153 |
| Steven C. Woodward, The Bombay Company | 300,000 | 0 | 0 | 0 | 300,000 |
| Elaine D. Crowley, The Bombay Company | 246,200 | 0 | 0 | 0 | 246,200 |
| MANUFACTURERS | |||||
| M. Farooq Kathwari2, Ethan Allen | $913,995 | $663,000 | $0 | $17,056,800 | $18,633,795 |
| David Montgomery, Tempur-Pedic | 372,164 | 63,717 | 26,185 | 2,895,878 | 3,357,944 |
| William R. McLaughlin, Select Comfort | 623,077 | 621,519 | 0 | 1,882,871 | 3,127,467 |
| Richard A. Manoogian, Masco | 1,500,000 | 1,425,000 | 135,900 | 0 | 3,060,900 |
| Warren G. Holliman, Furniture Brands International | 925,000 | 700,873 | 49,900 | 1,044,594 | 2,720,367 |
| Alan H. Barry, Masco | 967,000 | 749,000 | 88,120 | 0 | 1,804,120 |
| David J. McIlquham, Sealy | 621,250 | 745,104 | 0 | 0 | 1,366,354 |
| John T. Foy, Furniture Brands International | 545,654 | 415,598 | 0 | 260,993 | 1,222,245 |
| Jeffrey R. Scheffer, Stanley Furniture | 400,008 | 471,841 | 147,360 | 100,000 | 1,119,209 |
| Gerald M. Birnbach, The Rowe Cos. | 939,924 | 0 | 0 | 0 | 939,924 |
| Kurt Darrow3, La-Z-Boy | 630,513 | 286,746 | 0 | 0 | 917,259 |
| Robert A. Sitler, Jr., Stanley Furniture | 190,005 | 137,620 | 0 | 564,192 | 891,817 |
| James C. Raabe, Select Comfort | 243,077 | 177,811 | 0 | 401,412 | 822,300 |
| Robert Trussell, Jr., Tempur-Pedic | 545,000 | 181,485 | 7,200 | 0 | 733,685 |
| James B. Hirshorn, Sealy | 370,497 | 308,163 | 0 | 0 | 678,660 |
| Patrick H. Norton3, La-Z-Boy | 444,860 | 165,029 | 0 | 0 | 609,889 |
| Robert H. Spilman, Jr., Bassett Furniture | 325,000 | 150,514 | 0 | 0 | 475,514 |
| Benjamin Anderson-Ray, Chromcraft Revington | 198,958 | 250,000 | 14,676 | 0 | 463,634 |
| Michael E. Thomas, Chromcraft Revington | 146,089 | 0 | 27,338 | 259,745 | 433,172 |
| K. Bruce Lauritsen2, Flexsteel Inds. | 413,700 | 0 | 0 | 0 | 413,700 |
| Edward Teplitz2, Ethan Allen | 231,154 | 135,000 | 0 | 0 | 366,154 |
| Paul B. Toms, Hooker Furniture | 279,001 | 85,873 | 72 | 0 | 364,946 |
| Douglas C. Williams, Hooker Furniture | 270,001 | 85,873 | 155 | 0 | 356,029 |
| Donald D. Dreher, Flexsteel Inds. | 276,800 | 0 | 0 | 0 | 276,800 |
| Barry A. Birnbach, The Rowe Cos. | 260,000 | 0 | 0 | 0 | 260,000 |
| Keith R. Sanders, Bassett Furniture | 195,000 | 57,797 | 0 | 0 | 252,797 |
| Stephen R. Crowder, Decorize | 147,157 | 0 | 0 | 0 | 147,157 |
| James K. Parsons, Decorize | 116,554 | 0 | 0 | 0 | 116,554 |
| RENTAL, RENT-TO-OWN | |||||
| R. Charles Loudermilk, Sr., Aaron Rents | $454,000 | $932,821 | $0 | $0 | $1,386,821 |
| William K. Butler, Jr., Aaron Rents | 425,000 | 172,084 | 0 | 769,710 | 1,366,794 |
| Mark E. Speese, Rent-A-Center | 685,000 | 205,500 | 0 | 0 | 890,500 |
| Mitchell E Fadel, Rent-A-Center | 500,000 | 110,400 | 0 | 0 | 610,400 |
| William E. Morgenstern, Rent-Way | 398,077 | 150,000 | 0 | 0 | 548,077 |
| William Short, Rent-Way | 259,615 | 117,500 | 0 | 153,880 | 530,995 |
| SUPPLIERS | |||||
| Richard M. Rompala4, Valspar | $775,000 | $1,022,999 | $0 | $3,687,660 | $5,485,659 |
| Steven L. Erdahl4, Valspar | 439,385 | 149,610 | 0 | 584,939 | 1,173,934 |
| Felix E. Wright, Leggett & Platt | 838,380 | 318,472 | 1,147 | 0 | 1,157,999 |
| David S. Haffner, Leggett & Platt | 702,087 | 232,029 | 377 | 0 | 934,493 |
| Larry A. Liebenow, Quaker Fabric | 644,900 | 0 | 0 | 0 | 644,900 |
| Robert F. Hruby, CFC International | 546,669 | 26,623 | 0 | 0 | 573,292 |
| Robert G. Culp5, Culp | 416,000 | 0 | 0 | 0 | 416,000 |
| M. Beatrice Spires, Quaker Fabric | 312,700 | 0 | 0 | 0 | 312,700 |
| Gregory Jehlik, CFC International | 292,281 | 15,296 | 0 | 0 | 307,577 |
| Franklin N. Saxon5, Culp | 300,000 | 0 | 0 | 0 | 300,000 |
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Options lead to big paydays for top executives
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