By Daniel Gross
Every day, Michelle Leder and the crew at Footnoted.com pick through Securities and Exchange Commission filings in search of interesting tidbits on executive compensation. Every month she joins us to discuss some of the highlights and lowlights. In May, we learned that companies showered lavish compensation on well-known casino magnates, and at executives at highly visible firms like Abercrombie & Fitch and Dell.
The Suite Life with Sheldon Adelson. Sheldon Adelson, who presides over the Las Vegas Sands (LVS) empire, is a larger-than-life figure. A multibillionaire, he injected himself in the presidential campaign by bankrolling Newt Gingrich's quixotic primary effort. Adelson also lives large. And the company he controls helps to foot the bill. The company's proxy, filed in early May, revealed that Las Vegas Sands shelled out $2.6 million to cover security costs for Adelson and his family. That sounds like a lot of money. But the company reported that the controversial Adelson needs the protection. "The Company has received reports from its independent security consultant on the need to provide security coverage to Mr. Adelson and his family, most recently in March 2010 and April 2012," Las Vegas Sands reported in the proxy. In addition, Adelson's daughter and her family lived in suites at The Venetian for some period of time. The rent they paid, which was determined by a third party: $98,020. Oh, and Adelson's son-in-law, a vice president of corporate strategy, received nearly $600,000 from the company last year.
Wynn Wins Big. The stock of casino operator Wynn Resorts (WYNN) has been muddling along over the past couple years, as this chart shows. But in Vegas, the house always wins. Last year, Steve Wynn, the charismatic CEO of Wynn Resorts, saw his compensation rise to $16.47 million. The salary of $3.87 million was just the beginning. For most professionals, a single bonus is a nice surprise at the end of the year. But Wynn received two bonuses last year, one for $2 million, and another -- a "non-equity incentive plan compensation" bonus — for over $9 million. Now, with that kind of money being paid out, you'd think a guy would be able to afford his own personal travel, to put a roof over his head, and to buy luxury goods at retail prices. But Wynn clearly needed some extra help, courtesy of the shareholders. Footnoted.com found that Wynn received $1.5 million in "Other Compensation." That included: "$910,345 worth of personal flying time on the company's aircraft. There was also $503,831 worth of usage from a company-provided villa and $71,561 in merchandise discounts."
Bermuda Shorts. Insurance companies like to locate in Bermuda for several reasons. The weather is balmy, and the regulation and taxes are light. But planting offices in the pink sands of the Atlantic island doesn't mean you escape scrutiny of shareholders. Ordinarily, you'd think that convincing a professional to take a job in Bermuda wouldn't take much coaxing. But Axis Capital Holdings, which recently named Albert Benchimol as chief executive officer, has asked its shareholders to make some extra efforts. The offer letter to Benchimol included a $1.1 million salary, a target bonus of $1.9 million, and 500,000 restricted shares. Those shares vest over time, but are currently valued at $17.3 million, according to Foonoted.com. But wait, there's more. To avoid the isolation associated with living on a small island, Axis (AXS) shareholders will pay for Benchimol to have "up to 30 hours of personal use of the Company aircraft each calendar year." And because it's tough to find a nice place to live in Bermuda on a $1.1 million salary, shareholders will also pitch in to help Benchimol find shelter. He'll receive a $25,000-per-month housing allowance, which comes out to $822 per day.
Dressing Up Compensation at Abercrombie. Based on the returns they've been getting (here's a five-year chart), shareholders of Abercrombie & Fitch (ANF) likely can't afford to splurge much on clothing or other discretionary purchases. But CEO Michael Jeffries' rich compensation package should supply him with the fuel to shop at Barney's, Nordstrom's, and Neiman-Marcus for years to come. Footnoted.com reported that Jeffries "received more than $48 million in total compensation, although whether he will realize anywhere near that number is doubtful, if the company stays on its current, not-so-profitable course." He took home a $1.5 million salary, a $1.2 million bonus, $719,182 in other compensation and a whopping $43.2 million in restricted stock and other investment vehicles. This, at a time when the stock trades for about half the price it did a year ago. Shareholders rarely mobilize to oppose CEO pay at U.S. companies. But last year, only 56 percent of shareholders voting approved the company's executive compensation plan.
You're Getting a Dell. And $16 million. Remember Michael Dell? The entrepreneur started a direct-order personal computer company out of his dorm room and built it into a massive global firm. Dell (DELL) was one of the best-performing stocks in the S&P 500 in the 1990s. But for the last several years, it's had a hard time booting up. (Here's the depressing five-year chart.) The stock trades today about where it did in early 1998. And yet Michael Dell is still partying like it's 1999. Footnoted.com reports that the chairman and chief executive officer of the eponymous company received $16.1 million in compensation, way up from $4.3 million the previous year. Dell, who owned about 243 million shares in the company as of last spring, received a combined $11.8 million in stock and option awards. Oh, and he also got a $3.3 million cash bonus. Because when you're a billionaire and already own more than 10 percent of the company's common shares, it's only the prospect of more cash and shares that keeps you showing up for work every day. Nice work if you can get it.
Footnoted.com found another great nugget buried in the Dell proxy. It's common for companies to help senior executives move — especially if they have to sell their homes and move cross-country. "But Stephen F. Schuckenbrock, whose title is "President, Services", got a whopping $1.9 million in relocation benefits," Footnoted.com reports. Must have been a long-distance move, right? Not really. Schuckenbrock moved Round Rock, Texas, just outside Austin, to Plano, Texas, which is just outside Dallas —a move of about 200 miles. It wasn't the mover Schuckenbrock needed help with, apparently. Rather, it was getting out from under a poor real estate investment. Most of the assistance came in the form of "a cash payment of $1,500,000 to compensate him for the loss on the sale of his house in the Austin, Texas area."
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