Colorado Springs News, Sports & Business

Gazette Premium Content Colorado Springs CEOs saw pay drop in 2012

By Wayne Heilman Published: May 6, 2013

Good times didn't continue in 2012, at least as far as CEOs of the three public companies based in the Colorado Springs area are concerned. Compensation last year for the four CEOs of Century Casinos, Gold Resource and Spectranetics - the only area companies with stock traded on major exchanges - fell 5.6 percent from the previous year to $3.57 million with pay declining for three of the four CEOs. That compares with a 12.6 percent gain last year, according to proxy statements filed with the Securities and Exchange Commission. There are four CEOs of the three companies because Century Casinos has two co-CEOs.

Compensation includes salary, bonuses, stock options and other benefits. Local CEO pay has fallen in three of the past five years, though the 14.2 percent drop in 2010 largely resulted from the retirement that year of Emile Geisenheimer as CEO of Spectranetics, making him ineligible for bonuses or stock options. The number of local CEOs was reduced by one last year after California-based Cypress Semiconductor acquired Colorado Springs-based Ramtron International in November and Ramtron's top executives left the company.

Local CEOs did not fare last year as well as their counterparts nationwide, according to two annual studies. The AFL-CIO found that the average pay packages for CEOs of companies in the Standard & Poor's 500 stock index fell 5 percent from 2011 to $12.3 million, 354 times the annual pay of the average worker. The average CEO pay package declined mostly because Apple CEO Tim Cook's package fell from $378 million in 2011 to $4.2 million last year. Excluding Apple from the calculation, average pay of CEOs of the remaining companies in the index was up 5 percent from a year earlier. The union's study covered 327 companies that filed proxies with the SEC by the time the study was completed April 1.

Another survey of 1,500 large companies by professional services giant Towers Watson found CEO pay rose 1.2 percent last year, down from a 6.7 percent increase in 2011, mainly as a result of smaller bonus payments stemming from a slowdown in revenue and earnings that many companies experienced. The survey was based on 270 companies in the Standard & Poor's 1500 - which includes the stocks in its benchmark 500 index, its MidCap 400 and SmallCap 600 - that filed proxies by late March.

The average pay of local CEOs remains a fraction of what their counterparts in the rest of the state and nation receive. The average package for CEOs of the 71 Colorado companies included in the AFL-CIO study was $4.05 million, down 17.9 percent from a year earlier. That decrease is likely because the state's highest-paid CEO, Steve Ells of Chipotle Mexican Grill, earned $19.7 million, or about 38 percent of the $52.4 million brought home by the top-paid executive in 2011, Discovery Communications CEO David Zaslav. Discovery is now based in Maryland.

Spectranetics CEO Scott Drake pulled down the biggest paycheck among the local CEOs - $1.62 million. In 2012, his first full year on the job, Drake received $525,962 in salary, $581,400 in stock option awards, $442,337 in bonuses and $74,522 in other compensation that included a car service in lieu of relocation that cost $58,000 and can be used by other officers and key employees.

Gold Resource CEO William Reid pulled down the smallest pay package - $625,213, mostly because his $600,000 salary remained unchanged and he received no bonus last year; he did get a $22,500 contribution to his 401(k) retirement account, started by the company last year, and gold and silver coins and other payments totaling $2,713, none of which were given in 2011. The board's compensation committee said that since the company 'experienced several operational challenges during 2012 and which resulted in lower mineral production and sales than originally projected, discretionary cash bonuses for (officers and directors) consistent with prior years' awards were not appropriate. '

Results for stockholders in the three companies were mixed - Spectranetics shares more than doubled during 2012, while Century's stock was up 12.3 percent during the same period, and Gold Resource shares fell 25.2 percent in the wake of cutting its production forecast twice last year.

Stockholders of Gold Resource and Spectranetics approved executive pay packages during last year's annual meetings, in nonbinding votes required under Wall Street reform legislation enacted in 2010. Century will hold its first 'say on pay ' vote during its annual meeting Monday, which will be conducted entirely online for the first time.

A growing number of companies are broadcasting their annual meetings on the Web and allowing shareholders to participate online, but few are holding online-only meetings, said Kelly Howard, vice president of corporate communications for Broadridge Financial Solutions, which hosts virtual annual meetings.

Century's Peter Hoetzinger said the firm, which has stockholders split between North America and Europe and casinos on both continents as well as in the Caribbean and aboard cruise ships, has alternated its annual meetings between Europe and North America and wanted to make the meeting accessible to all its stockholders.

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Contact Wayne Heilman: 636-0234

Twitter @wayneheilman

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