Exercising options takes many over $1 million
By Larry Thomas -- Furniture Today, August 12, 2007
High Point — Exercising stock options made many senior furniture executives fiscally fit in 2006, helping push nearly three dozen past the $1 million mark in total compensation.
Of the 34 executives whose compensation exceeds $1 million, the majority wouldn't have hit the seven-figure mark without exercising options. And nearly half of the million-plus list wouldn't have made it without some type of one-time payment in addition to salary and bonus.
The latest Furniture/Today compensation survey, which was compiled from documents that publicly held companies are required to file with the Securities and Exchange Commission, also uncovered a wide variety of perquisites included in a catch-all category labeled "other annual income" on most regulatory filings.
In addition to items such as retirement plan contributions, car allowances and life insurance payments, the category included everything from personal use of a company airplane to travel expenses for a spouse to attend a company meeting.
Leading the latest survey was Robert Trussell Jr., the now-retired CEO of mattress manufacturer Tempur-Pedic. His total compensation of $14.08 million included a gain of $13.8 million from exercising stock options.
Trussell, who retired in April 2006, didn't receive a bonus last year and was paid a salary of $263,951 for the four months he was CEO.
Another mattress industry CEO, David McIlquham of industry sales leader Sealy, was second on the list with total compensation of $8.63 million. While $1.03 million came from exercising options, the bulk of the total came from a one-time payment of $6.69 million following last year's initial public offering.
A similar, one-time payment also propelled former Sealy executive James Hirshorn to the No. 10 spot on the list at $3.06 million. Hirshorn, who left the company in December, received an IPO payment of $2.22 million.
The third-highest compensation went to outgoing Masco Chairman Richard Manoogian, who routinely makes the top 10 on the survey. His total compensation of $7.87 million included $4.77 million in gains from exercising options.
Manoogian's salary of $1.5 million was the highest salary on the list and he was one of only three to earn $1 million or more in salary alone in 2006.
Fourth on the list was William Mansfield, chairman and CEO of coatings supplier Valspar, at $7.01 million, His total included $3.1 million from exercising options.
Following Mansfield was Bill McLaughlin, chairman and CEO of specialty bedding producer Select Comfort. McLaughlin, who was sixth on last year's survey, had total compensation of $5.35 million. That included $4.28 million from exercising options.
Sixth on the latest list was Howard Lester, chairman and CEO of Pottery Barn parent Williams-Sonoma. Lester, who was the highest-paid retail executive on the 2005 survey, had total compensation of $5.03 million. That included $3.7 million in gains from exercising options.
Lester was the highest-paid retail executive for the third consecutive year.
Williams-Sonoma executives, in fact, occupied the top four spots among retailers. President Laura Alber's compensation came to $3.11 million — good for ninth overall — while former CEO Edward Mueller was at $2.54 million and executive vice president Patrick Connolly was at $1.56 million.
In the seventh spot was Gilbert Danielson, executive vice president and chief financial officer of Aaron Rents, who had a total of $4.21 million. His total included $3.65 million from exercising options.
Danielson's Aaron Rents colleague, president and chief operating officer Robert Loudermilk Jr., was eighth at $3.95 million. His total included $3.38 million from exercising options.
Two other Aaron's executives, longtime CEO Charles Loudermilk and William Butler, president of the Aaron's Sales and Lease Ownership division, also topped $1 million in total compensation.
The two top executives at Aaron's larger rival, Rent-A-Center, had total compensation less than any of the four Aarons's executives.
Rent-A-Center president Mitch Fadel's total came to $1.364 million, and chairman Mark Speese was at $1.361 million.
Only two other retail executives topped $1 million. Rami Abada, president of Jennifer Convertibles, totaled $1.14 million, while Marvin Girouard, the recently retired CEO of Pier 1 Imports, totaled $1.13 million.
Girouard was one of the few million-dollar executives who didn't exercise any options during 2006. Some $1.08 million of his total compensation was salary.
Among manufacturing executives who weren't in the top 10 overall, 12 had total compensation of more than $1 million.
Masco executives John Leekley, David Doran, Alan Berry and Timothy Wadhams all made the seven-figure list, as did former Hooker Furniture President Doug Williams, who recently took early retirement, and Simmons Chairman Charlie Eitel.
Also on the seven-figure list were Farooq Kathwari, chairman of Ethan Allen; James Raabe, chief financial officer of Select Comfort; W.G. "Mickey" Holliman, chairman of Furniture Brands International; Larry Rogers, president of Sealy's North American business unit; Thomas Bryant, CEO of Tempur-Pedic; and Tom Foy, president of Furniture Brands.
Among suppliers, Mansfield's total compensation was fourth overall, and the next two highest on the supplier's list also were from Valspar. Paul Reyelts, chief financial officer, was at $1.94 million, and Steven Erdahl, executive vice president, was at $1.67 million.
Two executives of components supplier Leggett & Platt also exceeded $1 million, but as in past years, they opted to take large chunks of their salary and bonus in stock options.
Leggett Chairman Felix Wright's total compensation was $1.67 million, while David Haffner, president and CEO, had $1.26 million. Both figures do not account for the deferred salary and bonus.
Conversely, the lowest compensation totals on the list belonged to the top two executives at home accents manufacturer and importer Decorize for the second year in a row.
CEO Stephen Crowder totaled $135,000 and executive vice president James Parsons totaled $114,231. Their entire compensation was from salary, as neither received a bonus or other income, and they did not exercise stock options.
| Salaries, compensation packages for top furniture and bedding industry executives, 2006 | |||||
|---|---|---|---|---|---|
| Executive, company | Salary | Bonus | Other annual income | Options exercised | Total |
| Notes: 1. Fiscal year ended January 2007. 2. Includes $346,575 for use of company aircraft and $6,000 for car allowance. 3. Includes $6,000 for car allowance and $45,000 in dividend equivalent payments made with respect to outstanding restricted stock unit awards. 4. Director and CEO until July 14, 2006. 5. Includes termination payment of $1,965,625, payment of $116,250 in accrued but unused vacation time and floating holidays and an approximate $1,000 for administrative and clerical support. All are amounts paid in connection with the separation agreement entered into between the company and Mueller on July 9, 2006. Also includes a $3,000 car allowance. 6. Car allowance. 7. Fiscal year ended August 2006. 8. Excludes $168,704 which was accrued as of Aug. 26, 2006 but not yet paid. 9. Retired as of Feb. 19, 2007. 10. Fiscal year ended March 3, 2007. 11. Includes $16,999 for car allowance, $3,458 for club dues, $20,000 for planning and tax services and $3,851 in tax gross-ups. 12. Fiscal year ended Feb. 3, 2007. 13. Includes a $75,000 discretionary bonus and a $165,000 cash award under the company's management incentive plan. 14. Reflects relocation allowance. 15. Includes a $100,000 signing bonus, a $70,000 discretionary bonus and $146,296 of Dunaj's guaranteed bonus for fiscal year 2006 per his employment agreement. Also includes the remaining $53,704 of the guaranteed bonus as a part of the company's management incentive plan. 16. Includes a $4,375 car allowance, and $60,850 in relocation expenses. 17. President and CEO as of May 11, 2006. 18. Per Brunner's offer letter, the company agreed to pay him a bonus of up to 200% of his $245,000 base salary, with such amount to be prorated for the time he served as CEO in fiscal year 2006. 19. Consists of amounts reimbursed for travel, including airfare and lodging. 20. This amount paid upon commencement of employment. Employment with Cost Plus terminated on March 16, 2007. 21. Represents the base salary paid to Stewart for the partial fiscal year from June 5, 2006 through February 3, 2007. 22. In accordance with his employment agreement, Stewart was guaranteed a bonus of not less than $131,250 for fiscal 2006. 23. Director fees. 24. Excludes $168,704 which was accrued as of Aug. 26, 2006 but not yet paid. 25. Includes $13,200 for car allowance, $2,228 for club dues, $7,600 for planning and tax services and $3,829 in tax gross-ups. 26. Resigned as CEO and president on May 11, 2006. 27. Represents amounts paid as severance following the resignation. 28. Served as CEO until the annual stockholders' meeting held on April 28, 2006. At that time, he resigned from his executive officer position and remained as a member of the board of directors. 29. Fiscal year ended November 2006. 30. Represents amount paid for bonus payment under Sealy's annual bonus plan. 31. Represents amount paid as a result of the company's April 2006 initial public offering. 32. Reflects the annual performance-based cash bonus for 2006 that was paid in early 2007. 33. Includes $3,335 for reimbursements for taxes owed in connection with the attendance by spouses at an offsite management meeting and perquisites, $255,012 for personal use of company aircraft, and $19,931 for perquisites such as the attendance of wife at off-site management meetings and the use of a car and driver. 34. Represents annual incentive compensation earned in 2006. The payment occurred in February 2007. 35. Resigned and left the company on Dec. 15, 2006. Since his resignation, he has exercised all of his 1,146,432 in-the-money exercisable Sealy stock options. 36. Represents bonus payment in the amount of $119,101 under Sealy's annual bonus plan. Also includes a $25,000 chairman's award bonus. 37. Includes $2,999 for reimbursements for taxes owed in connection with the attendance by spouses at an offsite management meeting and perquisites, and $30,722 for the occasional personal use of company aircraft and perquisites such as the attendance of wife at off-site management meetings, financial planning, auto insurance and an executive health exam. 38. Includes an $82,750 cash payment received by Doran in early 2007 in lieu of the performance-based restricted stock award for 2006, prorated for a partial year of service. Also reflects the annual performance-based cash bonus in the amount of $81,458 for 2006 that was paid in early 2007. 39. Includes $2,341 for reimbursements for taxes owed in connection with the attendance by spouses at an off-site management meeting and perquisites, and $4,085 for perquisites such as the attendance of wife at off-site management meetings. 40. Retired as of October 31, 2006. 41. Fiscal year ended November 2006. 42. Includes a lump-sum early retirement payment of $214,966 and a lump-sum payment of $1,671,916 under the company's supplemental retirement plan. Available to be paid six months after the retirement date. 43. Includes $3,248 for reimbursements for taxes owed in connection with the attendance by spouses at an off-site management meeting and perquisites, $112,270 for personal use of company aircraft, and $13,489 for perquisites such as the attendance of wife at off-site management meetings, financial planning, auto insurance and an executive health exam. 44. Includes $160,299 for personal use of corporate jet, $15,583 for commuting expenses, a $12,000 car allowance, $11,691 for mattress sets, $7,678 for club memberships, $2,713 for non-business travel expenses and $6,933 for the assumption of taxes for certain taxable benefits. 45. Fiscal year ended June 2006. 46. Includes personal use of an employer-provided aircraft expenses $29,506. Aircraft operating costs per mile include fuel costs, maintenance, associated travel costs for the crew and certain office expenses. Also includes club dues/membership fees $4,989. 47. Represents a bonus payment in amount of $126,292 under Sealy's annual bonus plan. Also includes a $5,000 chairman's award bonus. 48. Promoted to CEO position in April 2006 and retained the position of president. He was also elected as a member of the board of directors. 49. Represents annual bonus amount of $198,000 and non-equity incentive plan compensation in amount of $311,550. Both amounts were earned in 2006 but paid in February 2007. 50. Includes $3,478 for reimbursements for taxes owed in connection with the attendance by spouses at an off-site management meeting and perquisites, and $10,924 for the occasional personal use of company aircraft and perquisites such as the attendance of wife at off-site management meetings and the use of a car and driver. 51. Includes personal use of an employer-provided aircraft expenses $10,255. Aircraft operating costs per mile include fuel costs, maintenance, associated travel costs for the crew and certain office expenses. Also includes club dues/membership fees $4,989. 52. Includes $235,678 for selling expenses related to the sale of Fendrich's personal residence, $12,803 for a relocation expense, $9,000 for a car allowance, $5,000 for financial consulting expenses, $4,616 for mattress sets, $1,143 for non-business travel expenses, $760 for the personal use of the corporate jet and $142,712 for the assumption of taxes for certain taxable benefits. 53. Fiscal year ended April 2007. 54. Includes relocation expenses reimbursed to Anderson-Ray under his employment agreement in the amount of $72,756 and a related tax gross-up of $50,247; and automobile allowance of $18,000 per year; excludes $10,000 for amounts not paid under the company's group health plan; company contributions to tax-qualified retirement plans of $8,800; and reimbursed group health plan premiums of $2,825. 55. Terminated employment with Stanley as of Sept. 1, 2006. 56. Fiscal year ended June 2006. 57. Includes car allowance or use of a company car, country club dues, tax planning services and other nominal perquisites. 58. Deceased as of May 2007. 59. Chairman and CEO since December 2000. President since November 2006. 60. Represents a payment to Kane of $4,666 for retirement benefits reduced under Internal Revenue Code limitations. Excludes an accrual of $53,772 for Kane's supplemental executive retirement plan; company contributions to tax-qualified retirement plans of $10,675; $9,999 for amounts not paid under the company's group health plan. 61. Fiscal year ended June 2006. 62. Includes a $50,000 discretionary bonus and a $124,836 non-equity incentive bonus. 63. Perquisites which may include car and/or club membership expenses. 64. Includes $15,016 for the personal use of company aircraft and $8,885 for car and/or club membership expenses. 65. Includes $63,862 for personal use of company aircraft and $16,171 for car and club membership expenses. 66. Perquisites in amount of $1,371 for personal use of company aircraft. 67. Includes a cash bonus in the amount of $532,800 under the MBO (management bonus opportunity) program, plus an additional $88,800 bonus for exceeding the consolidated net income target. 68. Fiscal year ended October 2006. 69. Includes $3,000 in fees for services as a director. Also includes $4,241 in tax gross-ups. 70. Includes $3,000 in fees for services as a director. Also includes $8,237 in tax gross-ups. 71. Expenses related to the leasing of an automobile used by Liebenow pursuant to the terms of his employment agreement. 72. Fiscal year ended April 2006. |
|||||
| RETAILERS | |||||
| W. Howard Lester, Williams-Sonoma1 | $975,000 | $0 | $352,5752 | $3,699,000 | $5,026,575 |
| Laura Alber, Williams-Sonoma1 | 700,770 | 0 | 51,0003 | 2,353,236 | 3,105,006 |
| Edward A. Mueller4, Williams-Sonoma1 | 450,000 | 0 | 2,085,8755 | 0 | 2,535,875 |
| Patrick J. Connolly, Williams-Sonoma1 | 566,538 | 0 | 6,0006 | 989,280 | 1,561,818 |
| Rami Abada, Jennifer Convertibles7 | 576,017 | 12,4818 | 0 | 556,000 | 1,144,498 |
| Marvin J. Girouard9, Pier 1 Imports10 | 1,080,769 | 0 | 44,30811 | 0 | 1,125,077 |
| Gary G. Friedman, Restoration Hardware12 | 573,155 | 240,00013 | 11,4006 | 0 | 824,555 |
| Barry J. Feld, Cost Plus | 675,000 | 0 | 104,46114 | 0 | 779,461 |
| Ken Dunaj, Restoration Hardware12 | 316,809 | 370,00015 | 65,22516 | 0 | 752,034 |
| Ray Brunner17, Design Within Reach | 240,202 | 315,47918 | 30,55619 | 0 | 586,237 |
| Frank Castiglione, Cost Plus | 300,000 | 50,00020 | 207,53314 | 0 | 557,533 |
| David B. Stewart, The Bombay Company | 403,84621 | 131,25022 | 0 | 0 | 535,096 |
| Clarence H. Smith, Haverty Furniture | 420,000 | 105,000 | 3,00023 | 0 | 528,000 |
| Clarence H. Ridley, Haverty Furniture | 410,000 | 96,000 | 3,00023 | 0 | 509,000 |
| Harley J. Greenfield, Jennifer Convertibles7 | 467,682 | 12,48124 | 0 | 0 | 480,163 |
| Charles H. Turner, Pier 1 Imports10 | 377,692 | 0 | 26,85725 | 0 | 404,549 |
| Tara Poseley26, Design Within Reach | 140,928 | 0 | 237,98127 | 0 | 378,909 |
| Steven C. Woodward, The Bombay Company | 315,000 | 0 | 0 | 0 | 315,000 |
| MANUFACTURERS | |||||
| Robert B. Trussell Jr.28, Tempur-Pedic | $263,951 | $0 | $2,4006 | $13,817,990 | $14,084,341 |
| David J. McIlquham, Sealy29 | 659,896 | 252,46130 | 6,690,95331 | 1,031,171 | 8,634,481 |
| Richard A. Manoogian, Masco | 1,500,000 | 1,320,00032 | 278,27833 | 4,770,392 | 7,868,670 |
| William R. McLaughlin, Select Comfort | 657,308 | 409,17434 | 0 | 4,283,581 | 5,350,063 |
| James B. Hirshorn35, Sealy29 | 415,005 | 144,10136 | 2,218,72731 | 285,455 | 3,063,288 |
| John R. Leekley, Masco | 747,500 | 335,00032 | 33,72137 | 1,907,052 | 3,023,273 |
| David A. Doran, Masco | 202,992 | 164,20838 | 6,42639 | 2,508,024 | 2,881,650 |
| Douglas C. Williams40, Hooker Furniture41 | 279,456 | 102,808 | 1,886,88242 | 0 | 2,269,146 |
| Alan H. Barry, Masco | 1,001,827 | 719,00032 | 129,00743 | 91,209 | 1,941,043 |
| Charles R. Eitel, Simmons | 780,000 | 856,239 | 216,89744 | 0 | 1,853,136 |
| M. Farooq Kathwari, Ethan Allen45 | 935,017 | 864,000 | 0 | 0 | 1,799,017 |
| James C. Raabe, Select Comfort | 268,077 | 122,37734 | 0 | 1,406,081 | 1,796,535 |
| W. G. (Mickey) Holliman, Furniture Brands International | 925,000 | 678,488 | 34,49546 | 0 | 1,637,983 |
| Lawrence J. Rogers, Sealy29 | 315,537 | 131,29247 | 742,38031 | 114,455 | 1,303,664 |
| H. Thomas Bryant48, Tempur-Pedic | 537,305 | 509,55049 | 7,2006 | 161,451 | 1,215,506 |
| Timothy Wadhams, Masco | 718,942 | 335,00032 | 14,40250 | 0 | 1,068,344 |
| John T. Foy, Furniture Brands International | 548,500 | 402,325 | 15,24451 | 70,946 | 1,037,015 |
| Stephen G. Fendrich, Simmons | 315,000 | 264,031 | 411,71252 | 0 | 990,743 |
| Kurt Darrow, La-Z-Boy53 | 675,000 | 150,000 | 0 | 0 | 825,000 |
| Benjamin M. Anderson-Ray, Chromcraft Revington | 375,000 | 75,000 | 141,00354 | 0 | 591,003 |
| Philip D. Haney55, Stanley Furniture | 176,680 | 0 | 0 | 400,481 | 577,161 |
| Donald D. Dreher, Flexsteel Inds.56 | 296,390 | 187,850 | 19,25257 | 0 | 503,492 |
| K. Bruce Lauritsen58, Flexsteel Inds.56 | 432,750 | 0 | 53,11757 | 0 | 485,867 |
| Jeffrey R. Scheffer, Stanley Furniture | 400,008 | 0 | 0 | 77,760 | 477,768 |
| Steven M. Kincaid, La-Z-Boy53 | 360,000 | 110,000 | 0 | 0 | 470,000 |
| Rodney D. England, La-Z-Boy53 | 360,000 | 110,000 | 0 | 0 | 470,000 |
| Paul B. Toms Jr.59, Hooker Furniture41 | 288,768 | 102,808 | 0 | 0 | 391,576 |
| Edward Teplitz, Ethan Allen45 | 235,000 | 150,000 | 0 | 0 | 385,000 |
| Robert H. Spilman, Jr., Bassett Furniture | 335,000 | 0 | 0 | 0 | 335,000 |
| Ronald J. Klosterman, Flexsteel Inds.56 | 302,200 | 0 | 26,11857 | 0 | 328,318 |
| Frank T. Kane, Chromcraft Revington | 243,250 | 40,000 | 4,66660 | 0 | 287,916 |
| Keith R. Sanders, Bassett Furniture | 200,000 | 0 | 0 | 0 | 200,000 |
| Stephen R. Crowder, Decorize61 | 135,000 | 0 | 0 | 0 | 135,000 |
| James K. Parsons, Decorize61 | 114,231 | 0 | 0 | 0 | 114,231 |
| RENTAL, RENT-TO-OWN | |||||
| Gilbert L. Danielson, Aaron Rents | $375,000 | $174,83662 | $6,39563 | $3,653,939 | $4,210,170 |
| Robert C. Loudermilk, Jr., Aaron Rents | 375,000 | 174,83662 | 23,90164 | 3,380,837 | 3,954,574 |
| R. Charles Loudermilk, Sr., Aaron Rents | 454,000 | 1,259,722 | 80,03365 | 0 | 1,793,755 |
| William K. Butler Jr., Aaron Rents | 450,000 | 243,120 | 1,37166 | 896,672 | 1,591,163 |
| Mitchell E. Fadel, Rent-A-Center | 510,000 | 298,350 | 0 | 556,200 | 1,364,550 |
| Mark E. Speese, Rent-A-Center | 740,000 | 621,60067 | 0 | 0 | 1,361,600 |
| SUPPLIERS | |||||
| William L. Mansfield, Valspar68 | $826,923 | $2,797,067 | $292,425 | $3,096,324 | $7,012,739 |
| Paul C. Reyelts, Valspar68 | 528,231 | 1,137,017 | 274,148 | 0 | 1,939,396 |
| Steven L. Erdahl, Valspar68 | 455,385 | 910,770 | 250,650 | 55,010 | 1,671,815 |
| Felix E. Wright, Leggett & Platt | 753,171 | 441,600 | 7,24169 | 464,000 | 1,666,012 |
| David S. Haffner, Leggett & Platt | 753,041 | 499,100 | 11,23770 | 0 | 1,263,378 |
| Larry A. Liebenow, Quaker Fabric | 644,900 | 0 | 8,20271 | 0 | 653,102 |
| Robert G. Culp III, Culp72 | 416,000 | 0 | 0 | 32,760 | 448,760 |
| Franklin N. Saxon, Culp72 | 300,000 | 50,000 | 0 | 13,650 | 363,650 |
| M. Beatrice Spires, Quaker Fabric | 312,700 | 0 | 0 | 35,629 | 348,329 |
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