Salaries at the top

Salaries at the top

May 15th, 2011 by Mike Pare in Business Around the Region


• $9 million: size of typical pay package for head of S&P 500 company CEO in 2010

• 11 percent: average gain in CEO pay in 2010 over 2009

• 39 percent: average increase in cash bonuses to CEOs

Source: AP, Wall Street Journal

Top executives for most Chattanooga area companies saw their pay rebound last year as profits swelled and stock prices climbed.

CEO pay grew on average by about 15 percent among local companies that are publicly traded or publicly report compensation, proxy statements show.

That's a little higher than an 11 percent gain recorded nationally in a study by Hay Group for The Wall Street Journal.

Thomas R. Watjen, Unum Group's CEO, drew $11.48 million in total compensation last year, company figures show. That's up 22.4 percent from a year ago, but less than the $12.26 million he earned in 2008.

Jim Sabourin, Unum's vice president of communications, said Unum's shares grew 26 percent in value last year.

"Over the last five years our shares have outperformed the S&P 500," he said, adding the insurer announced a 1.5 billion share repurchase in the last 12 months.

Still, Sabourin said, much of Watjen's pay package rise last year is attributed to changes in pension value. Those benefits, which the Securities and Exchange Commission requires companies to report, rose for Watjen because of the way the insurer calculates them for employees, he said.

Unum, in a separate calculation of executive pay that takes out pension benefit values, said Watjen's pay last year was $8.82 million, up less than 1 percent from 2009.

David R. Parker, CEO of trucking company Covenant Transportation Group, saw his total compensation package rise 58.6 percent to $1.13 million.

According to the company's proxy, Parker posted increases in both stock awards, $215,550 from $85,748 in 2009, and nonequity incentive plan compensation, $294,525 from zero the year before.

In 2010, Covenant's shares soared 129.9 percent in the year as the company reported its best earnings results since 2005.

At Calhoun, Ga.-based Mohawk Industries, CEO Jeffrey S. Lorberbaum's compensation grew 46.1 percent in 2010 to $2.19 million, according to the company's proxy.

Lorberbaum received a $66,000 bonus, while his stock award rose to $312,016 from $231,698 in 2009. Also, he received nonequity incentive plan compensation of $816,000, up from $270,000 in 2009.

Mohawk's shares rose 19.2 percent last year.

First Security Group Inc., a Chattanooga bank holding company, is yet to release its proxy statement with executive compensation from 2010.

An analysis by The Associated Press, using data from executive compensation research firm Equilar, showed that the typical pay package for the head of a company on the S&P 500 was $9 million in 2010.

The study showed that the biggest gains came in cash bonuses as two-thirds of executives got a bigger bonus last year than they had in 2009.

CEOs were rewarded as corporate profits soared last year with the economy gradually getting stronger and companies cutting costs. Profits for the companies in the AP analysis rose 41 percent last year.

Hodgson said that looking ahead in this year, he foresees similar size hikes in CEO pay.

"I think we'll see the same kind of increases," he said.