What are Charlotte's top five CEOs getting paid?
Charlotte has a new name atop its list of highest-paid CEOs: LendingTree’s Doug Lebda.
Lebda's pay soared in 2017 thanks to a pay package bolstered by options to buy company stock valued at $57.4 million. Awarded as part of a new four-year contract, the options pushed his total pay to $59.6 million. They're performance-based, meaning the company's shares must climb significantly for the options to pay out.
The tech company CEO bumped back last year’s top earner, Bank of America CEO Brian Moynihan, to No. 2 on the list. His compensation totaled $21.3 million, with a big chunk in the form of restricted stock tied to the bank meeting financial goals.
Duke Energy CEO Lynn Good had the third-highest pay package, receiving $21.1 million. Duke noted that approximately 90 percent of Good’s compensation was either in stock or based on future company performance.
In its annual analysis, the Observer reviewed securities filings for 24 public companies based in the Charlotte area, counting salaries, bonuses, stock grants, options grants and perks, such as supplemental payments for cars and use of the corporate jet.
The median pay for the 24 CEOs in 2017 was $5.9 million. That was down 11 percent from the median pay for the CEOs in 2016, excluding Brighthouse Financial chief Eric Steigerwalt, whose compensation for that year wasn't disclosed because the company was still part of MetLife.
Overall, the compensation at Charlotte-area companies was slightly below national figures.
CEOs at companies with more than $1 billion in revenue received median total compensation of $6.9 million in 2017, which was up from $6.1 million the previous year, according to compensation research firm Equilar.
As for Lebda, his pay ranked among the highest for any corporate boss in 2017, according to the Wall Street Journal's study of companies in the Standard & Poor's 500 index.
LendingTree wasn't big enough to make the list, but Lebda's compensation would have been the fourth-highest if it were. The CEO of computer chip maker Broadcom, Hock Tan, topped the Journal's rankings at $103.2 million.
Biggest increases, decreases
Lebda's big payday came in a year in which his company's stock rose 236 percent, one of the biggest jumps of any company last year. The online marketplace that matches borrowers and lenders also reported record revenue as it diversified product offerings.
The board's compensation committee said it designed the pay package to align his pay to increases in stock holder value and "strongly incentivize" Lebda to stay with the company through Sept. 30, 2022. Lebda founded the company in 1996 and took it public in 2000.
The big pay package meant Lebda recorded the biggest jump of the area CEOs in pay in 2017: a 3,158 percent increase from the $1.8 million he made in 2016.
Other CEOs with big increases were EnPro Industries' Stephen Macadam (up 71 percent to $5.6 million) and Duke's Good (up 57 percent to $21.1 million).
Extended Stay America CEO Gerardo Lopez saw his pay decline the most, falling 85 percent to $2 million. In 2016, a $12 million stock grant had boosted his pay, dispensed as part of his initial agreement to become CEO in 2015. Lopez has since left his post: He handed his CEO title to Jonathan Halkyard on Jan. 1 in what he called "a round of internal promotions."
This year's CEO list had a few changes from last year because snack maker Snyder’s-Lance and telecom company FairPoint Communications were acquired, while insurer Brighthouse Financial became a standalone company after being spun off from MetLife.
It will change even more next year.
Since the end of 2017, CEOs at six of the companies have either left or announced plans to leave.
Among these departing bosses, Lowe's CEO Robert Niblock made the most: $11.2 million, down 12 percent from 2016. Lowe's said in March he is retiring after 25 years with the home-improvement company but would stay on until a replacement was found. Lowe's announced Tuesday that it has named former J.C. Penney CEO Marvin Ellison its new CEO, effective July 2.
James Ferland of Babcock & Wilcox Enterprises, a company that engineers and manufactures power generation equipment, saw the biggest pay increase among those departing: 14 percent to $6.5 million, including a $2 million bonus largely tied to the company's 2015 spin-off. In 2017, the company's shares fell 65 percent and the company reported a $379 million net loss driven by tax-related and other charges.
In February, Babcock & Wilcox said it had appointed Leslie Kass to serve as CEO, with Ferland staying on as executive chairman until June 30. But in March, the company said Ferland was leaving the board as part of a transaction with an investment firm designed to shore up the company's financial footing.
In its proxy, Babcock & Wilcox said it "did not perform as expected in 2017," but the company "made substantial strides in addressing challenges that burdened our businesses and impacted our financial performance," noting a European renewable energy business contributed the largest portion of its losses.
Each year, proxy filings also reveal what perks CEOs receive as part of the pay. The value of these range from $900 (for John Ferriola of Nucor) to $1.7 million (for Frank Harrison of Coca-Cola Bottling Co. Consolidated). Here are some of the highlights.
▪ The biggest portion of Harrison's perks package was more than $1 million in contributions to a supplemental savings plan available to executives. He also received $243,013 worth of "gross-up" payments to cover taxes on his benefits and use of the corporate jet (his travel tab came to $137,753). Harrison also received $45,000 for a "flexible benefit allowance." The cash payment can be spent any way he sees fit, a rare perk for a Charlotte-area CEO.
"Each executive officer has the flexibility to keep or spend the allowance and is not required to report to the Company how the allowance is spent," the company explained in its proxy filing.
▪ Scott Smith, CEO of Sonic Automotive, received $82,713 worth of "demonstrator vehicles" from the company's dealerships, as well as $89,997 worth of personal use of the company's aircraft.
▪ Lopez, of Extended Stay, received a $36,000 "cost of living allowance," as well as $35,502 to cover his costs of traveling to and from Charlotte. The company also gave him $40,520 worth of gross-ups to cover his tax payments related to those benefits.
▪ Lebda, of LendingTree, received $199,667 worth of personal travel on company aircraft, $100,000 worth of reimbursement for legal and consulting fees to cover the cost of negotiating his employment agreement, and an "income tax restoration payment" of $83,545.
▪ Use of the corporate jet remained the costliest CEO perk for most companies. Moynihan, of Bank of America, received $205,084 worth of aircraft use; Good, of Duke, received $160,656 worth; Niblock, of Lowe's, received $103,908 worth; and Marcus Smith, of Speedway Motorsports, received $155,133 worth.
▪ Moving a CEO can be expensive. Door-and-window-maker Jeld-Wen spent $394,953 to help Mark Beck sell his house and relocate from Bethesda, Md. The company also gave him $24,876 in gross-ups to cover the taxes paid on his moving benefits. Beck left the company in February.
▪ Companies sometimes cover the cost of memberships to country clubs and other organizations, if executives claim they're used for business purposes. Paper-maker Domtar paid $11,325 for CEO John Williams' club membership, while Lebda received $4,837 for country club expenses.
▪ Companies sometimes cover a smattering of other daily expenses. Curtiss-Wright, which manufactures components for industries from aviation to nuclear power, paid $19,197 to provide CEO David Adams with use of an automobile and $10,080 to cover financial planning services. Domtar paid $35,045 to provide Williams with a corporate automobille. Babcock & Wilcox paid $14,553 for Ferland's financial planning services and an executive physical. Niblock received $9,304 worth of financial and tax-planning services.
▪ The perks package for Nucor's Ferriola was by far the smallest, clocking in at just $900 — a matching contribution to his 401(k) plan.