The Association of U S West Retirees



Colorado's top executives' 2009 pay packages exposed


The Denver Post

By Aldo Svaldi
June, 20 2010

Several media outlets list Oracle CEO Lawrence Ellison as the country's highest-paid executive in 2009 at $84.5 million.

But Gregory Maffei, president and CEO of Liberty Media, reported compensation of $87.5 million, according to the Douglas County company's proxy statement.

Maffei's pay package is so large it contributed to a 30 percent increase in overall compensation for the top two executives at Colorado's 50 largest companies (in market value) between 2008 and 2009, a Denver Post survey found.

Overall pay for the executives at the 50 companies studied rose from $283.8 million in 2008 to $370 million last year.

Average pay among those 100 executives was $3.94 million including Maffei, $3.1 million without him.

Colorado executives managed to win increases in compensation last year despite the economic slowdown that pushed down executive compensation nationally.

"Typically, what we have been saying is that pay has been going down," said Aaron Boyd, research manager with Equilar, a California firm that analyzes equity compensation.

Equilar's survey of the Standard & Poor's 500 reported a 7.9 percent decrease in executive pay last year.

A compensation survey from The Corporate Library, which studies corporate governance, reported declines of just under 3 percent in executive pay.

Even subtracting Maffei's influence, the compensation that companies reported for Colorado executives in proxy statements rose 8 percent, or $21 million.

Maffei's pay consisted mostly of $79.3 million in stock options that will become available to him in 2013 and 2014. His options, awarded as part of a new employment contract, boosted that category by 87.1 percent.

The economic crisis has accelerated the existing trend of U.S. corporations favoring equity over cash compensation, said Paul Hodgson, a senior research associate at The Corporate Library.

Lower stock prices last year made awarding options more advantageous, he said.

After options, the biggest gains came in a category called other compensation, which captures the perks executives receive but also their severance payouts when they leave.

Gary Black, who left as CEO of Janus with $8.8 million last summer, helped lift that category by 82 percent, or $10.5 million.

Bonuses rose 20.7 percent among the Colorado executives studied, much higher than the 8.5 percent for the S&P 500 as a whole, according to Equilar.

Given that Colorado doesn't host the large financial and auto firms under pressure to cut pay, Boyd said pay increases in Colorado don't come as a total surprise.

Also, companies in the S&P 400, a proxy for mid-cap companies closer to the Colorado companies in the survey, passed on executive pay increases of 1.7 percent last year.

A distant second to Maffei in pay last year was Qwest chairman and CEO Edward Mueller. He made $12.1 million, consisting mostly of $7.6 million in stock awards and $1.25 million of salary, the most base pay of the executives surveyed.

A newcomer to Colorado claimed third. Kent Thiry, chairman and CEO of Lakewood-based DaVita, a provider of kidney-dialysis services, reported $11.7 million, with $7.9 million in options and $2.5 million in cash incentives.

Executives from Colorado's larger corporations also ranked high for pay, including R. David Hoover at Ball Corp., Peter Swinburn at Molson Coors and Christina Gold at Western Union.

Two Denver-based companies boasted two executives each on the highest-paid list.

MDC Holdings chairman and CEO Larry Mizel made the top-paid list with $9.1 million, while president and chief operating officer David Mandarich wasn't far behind with $9 million.

The pair, who own sizable stakes in MDC, are perennials among the state's highest-paid executives, even with the housing crash that hit homebuilders hard.

Janus Capital Group also had two executives in the top 12. Besides CEO Black, there was co-chief investment officer and fixed-income fund manager R. Gibson Smith who made $7.5 million, much of that tied to cash-incentive plans.

"A large portion of the portfolio-manager compensation is based on the performance of the funds," said Jan us spokesman James Aber. Smith outperformed his peers and benchmarks, contributing to hundreds of millions in added gains for investors.

Aldo Svaldi: 303-954-1410 or