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Cablevision executives among highest-paid Long Island, N.Y.,
corporate leaders.
By Tami Luhby, Newsday, Melville, N.Y. Knight Ridder/Tribune
Business News
Jun. 27--It was a good year to be a top executive at Cablevision.
Not just one, but four Cablevision Systems Corp. executives --
including chief executive James Dolan and his father, Charles, the
company's chairman and founder -- made the Top 10 list in Newsday's
annual survey of compensation at Long Island's 100 biggest public
companies and banks.
Bankers also scored well in the annual survey, which found that the
gap between top earners and ordinary workers continued to widen.
What's more, top executives are trading in option awards, which
failed to pay off amid a lackluster stock market, in return for
stock awards that could prove more lucrative and which, in the eyes
of some critics, are less reflective of executives' performance.
James Dolan earned the No.1 spot among the 453 Long Island
executives surveyed, with a 2003 pay package of $16.4 million. This
is a repeat showing in the Top 10 for Dolan, who in last year's
survey ranked No. 9 with a $3.7-million package for 2002.
Cablevision Vice Chairman Hank Ratner landed in the No. 3 position
for 2003 with a $12.3-million compensation deal, while Charles Dolan
followed closely with a $12-million package. Rounding out the
company's Top 10 team was Vice Chairman William Bell, who placed
eighth with a $7.6-million deal.
High-powered payments like these helped push up the overall median
compensation package for Long Island executives to $352,719, a jump
of 10.8 percent in 2003 over 2002. The increase was fueled by a 146
percent rise in the median bonus, to $40,000.
A national survey of about 200 chief executives at large companies
found that their median total compensation, excluding stock options,
was up 18 percent last year, compared with 2002, according to Pearl
Meyer & Partners, a compensation consulting firm in New York City.
When options are included, however, median total pay actually went
down 1 percent, according to Jan Koors, managing director at Pearl
Meyer.
"Salary went up, bonus went up, restricted stock went up, but option
grant value decreased so much that it offset increases in the other
elements of pay," Koors said.
The typical worker nationwide, meanwhile, saw only a 2.23 percent
increase in pay.
Even though executives are being paid huge packages, boards of
directors are keeping a closer eye on them these days, experts said.
"Compensation committees are becoming more cautious ... [trying to
do] something they can justify," said Bruce Ellig, author of "The
Complete Guide to Executive Compensation."
At Cablevision, executives vaulted to the top of the charts for two
reasons. One is that the company granted bonuses for the first time
since 2000 as Cablevision's financial woes receded. Each of the
company's four highest-paid executives took home a seven-figure
bonus, ranging from $1.3 million for Bell to $4.8 million for
Charles Dolan.
The second is that Cablevision gave the executives hefty restricted
stock awards to replace previous stock-option packages that had lost
their value after the company's stock price declined. Restricted
stock is an outright grant of shares that have conditions on when
they can be sold. The stock awards carry a four- year vesting
period.
James Dolan received an $11.6-million award, while his father got
$5.2 million in restricted stock. Ratner was given $8.7 million in
restricted stock; Bell received $4.9 million.
A fifth Cablevision executive, Wilton Hildebrand, executive vice
president for engineering and technology, came in at No. 18 on the
Newsday survey with a total pay package of $3.9 million, including
$2.2 million in restricted stock.
The company declined to comment on the pay packages, though the
board of directors said in its proxy filing that the
bonuses "reflected the company's performance in exceeding virtually
all of its plans, goals and objectives for the year and the
leadership roles Mr. Charles Dolan and Mr. James Dolan played in the
company's achievements."
While Cablevision's digital cable television, high-speed Optimum
Online Internet service and digital Optimum Voice service are
gaining in popularity, its Voom nationwide satellite TV service
continues to struggle with start-up problems.
Also, the Securities and Exchange Commission continues to
investigate Cablevision in connection with improper accounting of
expenses at AMC Networks -- a Rainbow unit -- that prompted the
company to fire 14 employees a year ago, including AMC Networks
president Kate McEnroe.
In 2003, the company's sales climbed 10 percent, to $4.2 billion,
but it still lost $297 million. Its stock price rose 39.7 percent.
Raking in the bucks along with Cablevision executives were bankers,
who dominated the top of last year's executive compensation survey
and did well again. Four bankers -- Michael Manzulli and Anthony
Burke at New York Community Bank and John Kanas and John Bohlsen at
North Fork Bank -- made it into the Top 10.
Manzulli earned $11.1 million and Burke $6.7 million for serving as
co-chairman and senior executive vice president, respectively, at
New York Community, which operates Queens County Savings Bank, CFS
Bank, Roosevelt Savings Bank and Roslyn Savings Bank. Both cashed in
a large number of stock options, which increased their pay packages.
Burke has since left the bank.
New York Community has been struggling in recent months because of
its investments in mortgage-backed securities, which are losing
value as interest rates rise. The bank's stock is hovering around a
52-week low, and it has hired financial advisers to consider its
future.
Kanas, North Fork's chief executive, received $10.4 million, while
Bohlsen, the bank's vice chairman, was paid $7.3 million. Large
bonuses and restricted stock awards were part of that compensation.
The company declined to comment.
North Fork has been on an acquisition binge in recent months,
scooping up GreenPoint Bank and The Trust Company of New Jersey.
Kanas has said that North Fork will now sit back for a while and
digest these two purchases.
The trend toward restricted stock awards troubles some executive pay
experts. These gifts of stock, which usually don't vest for several
years, are increasingly replacing stock-option grants -- a perk that
worked well during the roaring bull market but left many executives
unable to collect during the cooler market of the past four years.
With restricted stock awards, executives can benefit if the stock
soars, but they still receive something if the value declines.
This past year, 51 Long Island executives in the survey received
restricted stock awards, ranging in value from about $3,000 for
executives at Frequency Electronics to the multimillion awards at
Cablevision and North Fork Bank.
Some experts are critical of restricted stock awards because they're
not based on performance. "It's simply an attendance award," Ellig
said. "It's a living-and-breathing award."
Ellig would like to see more compensation committees link stock
awards to performance. In some cases where awards are performance-
based, executives become vested after hitting certain targets. In
other cases, executives can accelerate their vesting if they hit
their marks.
What's particularly egregious in many current awards, said Brandon
Rees, research analyst for the AFL-CIO's Office of Investment in
Washington, is the trend toward letting executives exchange
worthless stock options for valuable restricted stock awards.
"Anytime you have executives trading in underwater stock options for
alternative stock packages without performance benchmarks, it's a
red flag for investors," Rees said.
Even when pay is linked to performance, some critics say
expectations are quite low.
"It would seem that the targets they are setting for themselves
aren't significantly challenging," said Paul Hodgson, senior
research associate at The Corporate Library, a Portland, Maine, firm
that researches company practices.
While restricted stock awards are popping up more often, stock
options certainly aren't going away. Long Island executives in the
Newsday survey cashed in a total of $106.3 million in options in
2003 and had another $890.9 million in potential gains from
unexercised options.
Jerome Swartz, for instance, the co-founder and former top executive
at Symbol Technologies, is expected to cash out up to $71 million in
options before they expire Thursday (those options were worth as
much as $82.7 million at the end of 2003).
Another trend that worries executive-pay watchdogs like Rees is that
pay increases for top executives continue to outstrip those of the
average worker. This discrepancy means that chief executives at
large companies across the country now outearn the typical worker by
more than 300 dollars to 1, according to United for a Fair Economy,
an advocacy group based in Boston. In 1982, the ratio stood at 42-1.
Looking locally, the median annual wage for a cable television
installer on Long Island is $42,749, according to ERI Economic
Research Institute, a compensation and benefits research firm in
Redmond, Wash. The median wage for bank tellers is $23,708.
"The gap between workers' and executives' wages shows that CEO pay
has not fallen back in line with historic norms," said Rees of the
AFL-CIO. "We have not yet reversed the excesses of the 1990s."
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corporate leaders.
By Tami Luhby, Newsday, Melville, N.Y. Knight Ridder/Tribune
Business News
Jun. 27--It was a good year to be a top executive at Cablevision.
Not just one, but four Cablevision Systems Corp. executives --
including chief executive James Dolan and his father, Charles, the
company's chairman and founder -- made the Top 10 list in Newsday's
annual survey of compensation at Long Island's 100 biggest public
companies and banks.
Bankers also scored well in the annual survey, which found that the
gap between top earners and ordinary workers continued to widen.
What's more, top executives are trading in option awards, which
failed to pay off amid a lackluster stock market, in return for
stock awards that could prove more lucrative and which, in the eyes
of some critics, are less reflective of executives' performance.
James Dolan earned the No.1 spot among the 453 Long Island
executives surveyed, with a 2003 pay package of $16.4 million. This
is a repeat showing in the Top 10 for Dolan, who in last year's
survey ranked No. 9 with a $3.7-million package for 2002.
Cablevision Vice Chairman Hank Ratner landed in the No. 3 position
for 2003 with a $12.3-million compensation deal, while Charles Dolan
followed closely with a $12-million package. Rounding out the
company's Top 10 team was Vice Chairman William Bell, who placed
eighth with a $7.6-million deal.
High-powered payments like these helped push up the overall median
compensation package for Long Island executives to $352,719, a jump
of 10.8 percent in 2003 over 2002. The increase was fueled by a 146
percent rise in the median bonus, to $40,000.
A national survey of about 200 chief executives at large companies
found that their median total compensation, excluding stock options,
was up 18 percent last year, compared with 2002, according to Pearl
Meyer & Partners, a compensation consulting firm in New York City.
When options are included, however, median total pay actually went
down 1 percent, according to Jan Koors, managing director at Pearl
Meyer.
"Salary went up, bonus went up, restricted stock went up, but option
grant value decreased so much that it offset increases in the other
elements of pay," Koors said.
The typical worker nationwide, meanwhile, saw only a 2.23 percent
increase in pay.
Even though executives are being paid huge packages, boards of
directors are keeping a closer eye on them these days, experts said.
"Compensation committees are becoming more cautious ... [trying to
do] something they can justify," said Bruce Ellig, author of "The
Complete Guide to Executive Compensation."
At Cablevision, executives vaulted to the top of the charts for two
reasons. One is that the company granted bonuses for the first time
since 2000 as Cablevision's financial woes receded. Each of the
company's four highest-paid executives took home a seven-figure
bonus, ranging from $1.3 million for Bell to $4.8 million for
Charles Dolan.
The second is that Cablevision gave the executives hefty restricted
stock awards to replace previous stock-option packages that had lost
their value after the company's stock price declined. Restricted
stock is an outright grant of shares that have conditions on when
they can be sold. The stock awards carry a four- year vesting
period.
James Dolan received an $11.6-million award, while his father got
$5.2 million in restricted stock. Ratner was given $8.7 million in
restricted stock; Bell received $4.9 million.
A fifth Cablevision executive, Wilton Hildebrand, executive vice
president for engineering and technology, came in at No. 18 on the
Newsday survey with a total pay package of $3.9 million, including
$2.2 million in restricted stock.
The company declined to comment on the pay packages, though the
board of directors said in its proxy filing that the
bonuses "reflected the company's performance in exceeding virtually
all of its plans, goals and objectives for the year and the
leadership roles Mr. Charles Dolan and Mr. James Dolan played in the
company's achievements."
While Cablevision's digital cable television, high-speed Optimum
Online Internet service and digital Optimum Voice service are
gaining in popularity, its Voom nationwide satellite TV service
continues to struggle with start-up problems.
Also, the Securities and Exchange Commission continues to
investigate Cablevision in connection with improper accounting of
expenses at AMC Networks -- a Rainbow unit -- that prompted the
company to fire 14 employees a year ago, including AMC Networks
president Kate McEnroe.
In 2003, the company's sales climbed 10 percent, to $4.2 billion,
but it still lost $297 million. Its stock price rose 39.7 percent.
Raking in the bucks along with Cablevision executives were bankers,
who dominated the top of last year's executive compensation survey
and did well again. Four bankers -- Michael Manzulli and Anthony
Burke at New York Community Bank and John Kanas and John Bohlsen at
North Fork Bank -- made it into the Top 10.
Manzulli earned $11.1 million and Burke $6.7 million for serving as
co-chairman and senior executive vice president, respectively, at
New York Community, which operates Queens County Savings Bank, CFS
Bank, Roosevelt Savings Bank and Roslyn Savings Bank. Both cashed in
a large number of stock options, which increased their pay packages.
Burke has since left the bank.
New York Community has been struggling in recent months because of
its investments in mortgage-backed securities, which are losing
value as interest rates rise. The bank's stock is hovering around a
52-week low, and it has hired financial advisers to consider its
future.
Kanas, North Fork's chief executive, received $10.4 million, while
Bohlsen, the bank's vice chairman, was paid $7.3 million. Large
bonuses and restricted stock awards were part of that compensation.
The company declined to comment.
North Fork has been on an acquisition binge in recent months,
scooping up GreenPoint Bank and The Trust Company of New Jersey.
Kanas has said that North Fork will now sit back for a while and
digest these two purchases.
The trend toward restricted stock awards troubles some executive pay
experts. These gifts of stock, which usually don't vest for several
years, are increasingly replacing stock-option grants -- a perk that
worked well during the roaring bull market but left many executives
unable to collect during the cooler market of the past four years.
With restricted stock awards, executives can benefit if the stock
soars, but they still receive something if the value declines.
This past year, 51 Long Island executives in the survey received
restricted stock awards, ranging in value from about $3,000 for
executives at Frequency Electronics to the multimillion awards at
Cablevision and North Fork Bank.
Some experts are critical of restricted stock awards because they're
not based on performance. "It's simply an attendance award," Ellig
said. "It's a living-and-breathing award."
Ellig would like to see more compensation committees link stock
awards to performance. In some cases where awards are performance-
based, executives become vested after hitting certain targets. In
other cases, executives can accelerate their vesting if they hit
their marks.
What's particularly egregious in many current awards, said Brandon
Rees, research analyst for the AFL-CIO's Office of Investment in
Washington, is the trend toward letting executives exchange
worthless stock options for valuable restricted stock awards.
"Anytime you have executives trading in underwater stock options for
alternative stock packages without performance benchmarks, it's a
red flag for investors," Rees said.
Even when pay is linked to performance, some critics say
expectations are quite low.
"It would seem that the targets they are setting for themselves
aren't significantly challenging," said Paul Hodgson, senior
research associate at The Corporate Library, a Portland, Maine, firm
that researches company practices.
While restricted stock awards are popping up more often, stock
options certainly aren't going away. Long Island executives in the
Newsday survey cashed in a total of $106.3 million in options in
2003 and had another $890.9 million in potential gains from
unexercised options.
Jerome Swartz, for instance, the co-founder and former top executive
at Symbol Technologies, is expected to cash out up to $71 million in
options before they expire Thursday (those options were worth as
much as $82.7 million at the end of 2003).
Another trend that worries executive-pay watchdogs like Rees is that
pay increases for top executives continue to outstrip those of the
average worker. This discrepancy means that chief executives at
large companies across the country now outearn the typical worker by
more than 300 dollars to 1, according to United for a Fair Economy,
an advocacy group based in Boston. In 1982, the ratio stood at 42-1.
Looking locally, the median annual wage for a cable television
installer on Long Island is $42,749, according to ERI Economic
Research Institute, a compensation and benefits research firm in
Redmond, Wash. The median wage for bank tellers is $23,708.
"The gap between workers' and executives' wages shows that CEO pay
has not fallen back in line with historic norms," said Rees of the
AFL-CIO. "We have not yet reversed the excesses of the 1990s."
------------------------ Yahoo! Groups Sponsor --------------------~-->
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Now with Pop-Up Blocker. Get it for free!
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<*> To unsubscribe from this group, send an email to:
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<*> Your use of Yahoo! Groups is subject to:
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