Kempner: Little-known Georgia CEOs paid like movie stars, athletes


Frank Bisignano and Ronald Clarke were paid last year as if they were A-list actors or among the best pro athletes in the world.

They are neither.

Bisignano and Clarke are chief executives of decent-sized Georgia public companies. Not the very biggest Georgia companies, mind you. Not ones most people would recognize.

Yet last year, Bisignano was received about as much as the combined compensation of four highly rated CEOs of businesses you have heard of: Microsoft, JPMorgan Chase, Disney and General Motors.

He tallied $102.2 million last year as CEO of First Data, a major payments processing company. (He won’t get to pocket most of the money unless he stays with the company for several more years, according to a company filing, to which a representative pointed me when I sought comment.)

In 2016, Clarke was the most richly compensated public CEO in Georgia. He leads Gwinnett-based FleetCor Technologies, which supplies employee fuel cards and credit card-like services.

In 2017, his pay doubled to more than $52 million. And that was after shareholders chided the company’s board two years in a row for paying him too much. His 2017 compensation was about twice that of AT&T’s CEO, who leads a company about 72 times larger.

His own shareholders voiced outrage for a stunning third time in a row.

Welcome to the wild world of CEO compensation.

Despite lengthy explanations from compensation committees of boards, it can still be confounding and, sometimes, maddening for shareholders.

FleetCor sent me a statement highlighting a focus on “outstanding shareholder returns over the long run.” And it said the vast majority of Clarke’s pay is based on performance and not guaranteed. Also, “we also recognize the critical importance of shareholder feedback and have taken their input into account” in adjusting CEO pay for this year to no more than $8 million.

“Complete joke”

On the campaign trail, now-President Donald Trump called increasing CEO pay “a total and complete joke” and blamed it at least in part on CEO’s having friends on corporate boards that set their pay.

Checking out CEO pay can be a voyeuristic pleasure, a peek at the finances of the half a percenters offers proof that there are rich rewards for some of those who make it to management’s top ranks.

It’s less pleasant if you’re a dissatisfied shareholder unconvinced that the CEO is worth an astronomical cost. Or if you’re an employee who sees soaring CEO pay as an example that top bosses expect everyone but themselves to do more with less.

Get your blood pressure under control before looking at newly required disclosures of how CEO pay compares to the median for their employees. Several years ago Congress mandated the changes, apparently in hopes it might pressure companies to corral CEO pay inflation.

Good luck with that.

One CEO = 2,028 of you

CEOs are paid as if their work is way, way more valuable than what most people do.

Bisignano, for example, received the equivalent of 2,028 workers making the median $50,406 pay at First Data. At FleetCor, Clarke made as much as the combined take of 1,517 of his worker bees making $34,700.

Both are outliers.

Bisignano and Clarke were among the 10 most highly compensated public CEOs in the nation last year, according to Equilar, an executive compensation researcher that analyzed businesses with more than $1 billion in revenue. (Bisignano has been in the top 10 before and Clarke wasn’t far off in the past.)

The median pay for the 200 highest paid CEOs last year was $17.5 million, up 14 percent compared to the median year earlier, Equilar found.

The CEOs were paid at a rate of 275 to one compared to the median compensation of their employees.

Don’t get too hung up on comparing pay ratios across different industries with wildly different workforces.

Southern Company, much includes regulated monopoly Georgia Power, reported that it’s median employee compensation was $138,000. So Southern’s CEO pay ratio (114 to one) is way less than that for Home Depot (552 to one), which calculates its median as an hourly associate making about $21,000 annually.

By the way, Southern CEO Thomas Fanning’s compensation was $15.7 million, well above the $11.6 million Home Depot CEO Craig Menear got for running a company with more than four times higher sales.

See, sometimes size doesn’t matter.

Home Depot CEO Craig Menear, who runs the biggest public company in Georgia, told he doesn’t feel underpaid, even when I informed him he receives much less than the CEO of much smaller FleetCor. Menear told he wasn’t really familiar with the company.

“An almost impossible job”

CEO jobs at big companies aren’t for wimps.

“It’s an almost impossible job with all the things you have to do,” Denny Beresford told me.

He’s seen that up close. A former University of Georgia accounting professor and now an executive in residence there, Beresford served on the boards of directors for six companies.

CEOs often work crazy long hours, juggle massive decisions and sort through complex issues, he said.

Of course, they also get expert help and advice from lots of underlings and consultants (unlike some small business owners). And for some CEOs at big companies the price of failure can be buffered by golden parachute agreements.

Chief executives can have a big impact on company success, Beresford told me. Still, he said,”CEOs probably get paid more than they should in a perfect world. But we don’t live in a perfect world.”

Beresford, who was involved in plenty of CEO compensation discussions while serving on corporate boards, told me the main considerations included how to continue the overall success of the businesses. That created pressure to keep good CEOs happy.

“It’s a very careful balancing act,” he said.

Above average CEOs

Corporate boards fuel CEO pay inflation, according to Charles Elson, a University of Delaware professor who specializes in corporate governance.

They often set targets to have their CEO get compensated like the top half of chiefs at peer companies. Everybody gets treated like they’re above average as a CEO. (And here we were thinking it was only kids and millennials getting the snowflake treatment.)

Boards worry that CEOs will jump to peer companies if they don’t get enough pay. But such jumps rarely happen, Elson told me.

What’s also rare is having enough shareholders vote to create pressure for changes in CEO pay. Most advisory say-on-pay votes at public companies pass by an overwhelming margin.

A Southern Company say-on-pay vote passed by an unusually low margin last year. Apparently some shareholders didn’t like the board excluding the financial debacle in construction of a Mississippi power plant when calculating the CEO’s incentive pay.

The board said it kept that feedback in mind and reduced the CEO’s potential incentive pay last year by millions of dollars. But the CEO’s total compensation didn’t go down by that much, even after excluding a multimillion-dollar boost in pension value changes.

See why shareholders might be confused? Still, this year the say-on-pay vote passed easily.Still, this year's say-on-pay vote passed easily by Southern shareholders. 

 FleetCor, though, got hammered again by its shareholders. More than 85 percent of voting stockholders voted against the Gwinnett company's pay for top executives. 

 It was the third time in row FleetCor's stockholders have called for pay sanity from the company they own.

Pay for CEOs of Georgia’s biggest public companies
Company Name* Total Compensation** Ratio CEO-to-Median Employee Pay
First Data Frank Bisignano $102,210,395 2,028 to 1
Fleetcor Ronald Clarke $52,643,810 1,517 to 1
Aflac Daniel Amos $22,830,984 300 to 1
Southern Co. Thomas Fanning $15,702,228 114 to 1
Equifax Richard Smith $15,693,578 -----------
Coke Muhtar Kent $14,792,439 -----------
AGCO Martin Richenhagen $14,724,596 297 to 1
Intercontinental
Exchange
Jeffrey Sprecher $14,461,116 106 to 1
UPS David Abney $14,608,732 274 to 1
Invesco Martin Flanagan $13,805,195 141 to 1
Delta Ed Bastian $13,205,703 142 to 1
NCR William Nuti $12,435,018 213 to 1
Home Depot Craig Menear $11,641,012 552 to 1
Coke James Quincey $10,582,230 230 to 1
SunTrust William Rogers $9,592,062 159 to 1
Global Payments Jeffrey Sloan $9,135,783 159 to 1
Acuity Brands Vernon Nagel $7,708,901 -----------
Carter’s Michael Casey $7,656,246 876 to 1
Total System Services Troy Woods $7,050,090 114 to 1
Aaron’s John Robinson $7,019,209 223 to 1
Veritiv Mary Laschinger $6,604,317 111 to 1
Flowers Foods Allen Shiver $6,496,650 105 to 1
HD Supply Joseph DeAngelo $6,370,346 133 to 1
Graphic Packaging Michael Doss $5,976,240 109 to 1
PulteGroup Ryan Marshall $5,771,847 69 to 1
Beazer Homes USA Allan Merrill $5,771,566 ----------
Mohawk Jeffrey Lorberbaum $5,017,713 123 to 1
Genuine Parts Paul Donahue $4,919,486 139 to 1
Asbury Automotive Craig Monaghan $4,896,108 105 to 1
Equifax Paulino do Rego
Barros
$3,724,434 65 to 1
BlueLinx Holdings Mitchell Lewis $2,215,190 -----------
GMS G. Michael Callahan $1,662,892 -----------
BMC Stock Holdings Peter Alexander $1,576,920 42 to 1
*Some CEOs listed no longer serve in that position with the company or served only part of the year.
As a result, some companies have more than one CEO listed.
**For 2017 fiscal year, including salary, stock awards, option awards, non-equity incentive plan compensation,
change in pension value and non-qualified deferred compensation on earnings, all other compensation.
SOURCE: Company proxies filed with the U.S. Securities and Exchange



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