The Top Pay Grade
Improved business nets bigger checks
By Jim Milliot
Executives in different parts of the publishing business did fairly well in 2010, according to PW's annual look at salaries. With the exception of those at Books-A-Million and Scholastic, compensation for the top managers went up in the past year as their companies saw generally improved results after recession-plagued years in 2008 and 2009.
The company that takes the most different approach to compensating its executive officers is Amazon, employing a policy heavily used in Silicon Valley. The country's largest online retailer keeps its base salary low, preferring to reward its management team with stock awards and options that it believes tie total compensation to long-term shareholder value. According to its 2010 proxy statement, 95% of the total pay for its five named executive officers was in the form of stock awards. To that end, the leaders of its retailing teams, Diego Piacentini and Jeff Wilke, received stock awards of $6.5 million and $7.0 million, respectively, in 2010. CEO Jeff Bezos took his usual nominal salary of $81,840 in the year and received no new stock awards. However, he does own just over 88 million Amazon shares, which even with recent market declines are worth roughly $1.7 billion. Amazon gives its executives few extra perquisites, although it does pay about $1.6 million to provide security for Bezos.
At Books-A-Million, the base salaries of chairman Clyde Anderson and executive v-p/chief of merchandising Terry Finley both rose slightly in the year, but incentive pay was reduced as sales and earnings both fell. Anderson, however, did receive $654,300 in stock awards in the year, up from $165,000 in 2009, while Finley's stock awards rose to $254,450, from $66,000.
Courier Corp. returned to profitability in the fiscal year ended September 25, 2010, and the long-term incentive payout for company chairman James Conway jumped by almost $300,000, accounting for most of the 45.5% boost in take-home pay in the year. V-p of publishing Eric Zimmerman's salary held even, but he earned $31,110 in incentives in the year.
Randall White, Educational Development Corp. chairman, saw his base salary stay at $150,000 in the fiscal year ended February 28, 2011 (and he's slated to earn that amount on his contract through fiscal 2013), but his bonus rose by $6,000 in the year. White is also EDC's largest shareholder, owning just under 768,000 shares.
The biggest factor in driving up the pay for Harlequin president and CEO Donna Hayes was a C$500,000 increase earned under Harlequin's long-term incentive plan. Her base salary remained flat in the year.
Penguin Group chairman John Makinson enjoyed a bump up in salary and annual incentives in 2010 as did the head of Pearson's North American Educational group, Will Ethridge. At current exchange rates, Makinson took home just over $2 million last year and Ethridge just under $2.5 million. Makinson also received another £218,653 in location premium for managing Penguin's U.S. operation.