SEE WHAT THE TOP BOSSES IN THE STATE MADE IN 2018
Despite down year for most investors, salaries at highest levels increased
Kent Thiry, who stepped down as CEO of Denver-based Davita Corp in June, is going out on top, at least when it comes to executive compensation.
Thiry, who retains the post of executive chairman at the provider of kidney dialysis treatments, reported total compensation of $32 million and change last year, more than double what he made in 2017.
That was enough to rank him as Colorado’s highest-paid executive, according to 2018 compensation numbers on 468 executives compiled by S&P Global Market Intelligence from corporate proxies.
Salary, or the cash in hand that most people consider pay, accounted for $1.3 million of Thiry’s total compensation. Another $21 million came in the form of restricted shares which vest over time and $5.7 million in stock options.
Those may or may not pay off, depending on how Davita’s shares perform in the months ahead. Last year, the company’s share price dropped 28.8 percent, but it is up 16 percent this year.
Thiry, who has had a strong hand in shaping Davita for the past two decades, will be relying on the team led by Javier Rodriguez, who replaced him, to cash in on the value of those shares and options.
Davita, in a statement, attributed the big jump in Thiry’s compensation to changes in accounting rules for share grants that vest after retirement, not to an extra helping of awards.
“As a result, our 2018 CEO pay was higher than prior years largely due to a onetime accounting charge, and not because incremental equity was granted. Without this, Kent’s 2018 pay would have been half the amount,” the company said.
The second-highest paid executive in Colorado, Greg Maffei, president and CEO of Liberty Media Corp., had $20.1 million in total compensation last year.
Maffei is a regular on the Colorado highest-paid executive list, and a handful of times has even led national lists. In 2014, he reported $124.1 million in total compensation.
John Malone, founder of the Liberty Media group of companies, rewards his top managers well, provided they deliver. Two other Liberty-family executives ranked among the state’s 10 highest-paid executives.
Michael George, president and CEO of Qurate Retail, ranked fifth in Colorado with total compensation of nearly $14 million. Qurate’s holdings include cable television retailers HSN and QVC, as well as ecommerce site Zulily and Cornerstone Brands.
Right behind him was Balan Nair, president and CEO of Liberty Latin America, who had reported compensation of $13.3 million last year, an increase of 158.8 percent from 2017. Liberty Latin America, a cable system operator, spun off from Liberty Global at the start of last year.
Michael Fries, CEO and chairman of Liberty Global, made $33 million, almost $1 million more than Thiry, and would have claimed the top spot. But Liberty Global, while it runs its worldwide operations out of a Denver office, technically remains a PLC, or British company, based in London.
ANGI Homeservices made a big splash on last year’s executive compensation list, with then CEO Christopher Terrill pulling down $68.8 million and chief product officer William Brandon Ridenour raking in $60.7 million.
That huge payout followed the merger of Golden-based Homeadvisor with Angie’s List in 2017.
Terrill left and Ridenour replaced him as CEO at the digital platform that connects consumers with home repair contractors. Despite a nearly 75 percent cut in pay, Ridenour’s compensation of $15.8 million last year was enough to rank him as the third highest-paid executive in the state.
The lack of the huge payouts from ANGI Homeservices in 2018 pushed the average pay of the top two executives at the 50 largest Colorado companies in market value down 13.1 percent to $5.45 million last year.
Median pay, the point where half of the executives made more and half made less, came in at $4.26 million, up 4.2 percent from 2017. In 2008, it was $2.18 million.
For the 468 Colorado executives examined, cash in hand, consisting of salary and bonus, represented only a fifth of their total compensation last year. That’s up from 18 percent of the total in 2017.
The vast majority came in restricted shares and other stock awards. Stock awards, consisting of either shares that vest over time or shares provided after hitting performance targets, accounted for 46.4 percent of compensation.
Option awards, or the right to buy shares at a given price, dropped down to 11.9 percent of total compensation after surging to 28.5 percent of compensation in 2017.
Large companies, in particular, have placed a heavier emphasis on performance-based stock grants, said John Sinkular, a partner at Philadelphia-based Pay Governance LLC, which counts around 400 clients.
“At the end of day, boards of directors are trying to hold the management team accountable to the strategy,” Sinkular said.
Companies have also tried to become more consistent regarding the amount of stock and option awards they hand out yearto-year, which Sinkular called the “regular annual grant cadence.”
But special awards, retirements and merger and acquisitions can cause that rhythm to speed up in a big way.
The compensation numbers for Colorado show a big jump in other forms of compensation, a category that includes severance and perks like travel on private jets. Those represented 2.5 percent of pay in 2017, but rose to 5.3 percent last year, due largely to some big payouts made to departing executives.
Michael Watford, former chairman, CEO and president of Ultra Petroleum Corp., received $8.7 million in other compensation, the most of any executive in the survey.
Almost all of that involved severance payments tied to his departure. But Watford also received some nice parting gifts, including $59,396 tied to the transfer of the title to the company car he drove and $5,187 in concert tickets.
Randy Wiese, outgoing CFO at CSG Systems International received $4.07 million, again tied mostly to severance. William Fitzgerald, chairman of Ascent Capital Group, reported $3.7 million in other compensation, of which $2.9 million was a lump-sum severance payment.
Sustained gains in the housing market helped MDC Holding’s chairman and CEO Larry Mizel, and David Mandarich, its president and chief operating officer, both break into the highest-paid list again.
The two were regulars in the years before last decade’s housing crash. Mizel had reported compensation of $11.6 million, which ranked eighth in the state, while Mandarich had $11.2 million, which qualified as 10th highest.
Michael Long, chairman, CEO and president of Arrow Electronics, claimed the fourth spot with $15.4 million in compensation, which was 39.5 percent above what he made in 2017.
One of the more unusual appearances was that of Andrew Crouch, former president and COO of Zayo Group Holdings, a provider of broadband services. Crouch made $12.7 million last year, a 403 percent increase from the year before.
He stayed at Zayo only a year before unexpectedly resigning in May 2018. Crouch said at the time he had no immediate plans and would take time to consider his next venture. But by jumping ship, he was able to claim $12.4 million in stock awards.
Also making the highestpaid list in the ninth spot was Gary Goldberg, CEO of Newmont Goldcorp., with $11.2 million in compensation.
Besides executive pay information, corporate proxies for the past two years have included a ratio of CEO compensation to median worker pay, which critics of rising wealth inequality have pushed hard to get included.
Crocs had the largest gap between CEO and worker pay, with CEO Andrew Rees making 634 times the median annual pay of workers at the Niwot shoemaker. Rees made $9.1 million, while workers, many of them based overseas, made $14,344.
Other Colorado companies where the CEO made more in a day, at least on paper, than employees did in a year included Davita, Qurate Retail and Liberty Latin America.
ANGI Homeservices, Western Union, Arrow Electronics and Pilgrim’s Pride were other Colorado companies where CEOS made more than 200 times the median pay of workers.
Natural resource companies had some of the smallest pay gaps in the state, which reflects a higher pay scale for workers across the board in that sector.