Glass Leads Executive Pay List With $9.2 Million Package

1997 was a great year for top executives of many of Northwest Arkansas’ publicly held companies and, in particular, for Wal-Mart Stores Inc.’s upper management.

In past years, the salary of president and CEO David Glass had been miserly in comparison to executives of other international companies. In 1997, Glass moved up a single notch — to No. 1 — on the list of executive compensation compiled by the Northwest Arkansas Business Journal.

But in actual numbers, Glass’ salary catapulted far ahead of any of his fellow executives from the region. Thanks in large part to nearly $4.7 million in stock options Glass exercised as well as a performance bonus of $1.1 million (nearly three times what he was paid the previous year), Wal-Mart’s CEO received a whopping $9.2 million in 1997.

In fact, Wal-Mart executives monopolize the top five positions on the list. They are: Donald Soderquist, chief operating officer, $5.3 million; Thomas Coughlin, $2.8 million; Bob L. Martin, $2.6 million; and H. Lee Scott Jr., $2.5 million. Coughlin, Martin and Scott are all executive vice presidents.

Wal-Mart typically earns high marks from shareholder groups that advocate tying executives’ compensation to stock performance, the idea being that the managers then have vested interests in ensuring that the company does well.

And it is true that Wal-Mart stock has traded recently at record levels, reaching $69 a share in mid-July.

But that wave of record highs is a recent phenomenon. Wal-Mart stock was trading in the low $30s a year ago,reflecting a lackluster performance that drew complaints from shareholders at the 1997 annual meeting, so it’s likely that top executives will fare even better in 1998.

Glass’ move up in terms of compensation knocked Don Tyson, senior chairman of Tyson Foods Inc., out of the top position on the Journal’s list, and, in fact, Tyson’s compensation dropped.

Tyson earned $1.75 million in 1996 but received only $1.58 million in 1997, enough to land him in eighth position on the list.

At the other end of the spectrum is the top management of Advanced Environmental Recycling Technologies Inc.

For the second year in a row, the company’s CEO and chairman of the board, Stephen W. Brooks, took no salary from his family’s still-struggling company although he did receive 250,000 stock options.

Brooks assumed the company’s top position after the sudden death of his father, Jim G. Brooks, in 1996. The elder Brooks had also worked without pay, choosing to delay compensation until the company was on sound financial footing.

Executives at another struggling company, National Home Centers Inc., didn’t enjoy raises, either.

Danny Funderburg, president and chief operating officer, received $102,000, about $300 less than he made in 1996. Company founder and CEO Dwain A. Newman earned $97,000, up slightly from the $95,000 he received the previous year. Larry Chumley, a division president, earned $80,000, the same amount he was paid in 1996.

Some executives did well even as their stock struggled.

At Southwestern Energy Co., for example, Harold Korell, executive vice president and chief operating officer, received nearly $1.4 million in compensation while CEO Charles Scharlau earned $908,000. Shareholders haven’t fared nearly as well, however, as the stock is still languishing.

And at American Freightways, where the stock has never recovered since a surprise announcement last December that earnings were considerably less than anticipated, top management earned generous compensation packages last year.

F.S. Garrison, the company’s chairman, earned a modest increase, with compensation of $279,000, up from $266,000 in 1996.

But his two sons got nice raises. Tom Garrison, who just this month moved into the position of president and chief operating officer, earned $264,000 in 1997, up from $175,000 the previous year. And Will Garrison moved up from $142,000 in 1996 to $250,000 in 1997. He was recently promoted to corporate vice president and secretary/treasurer.

Just two women made the list, but that’s twice as many as last year.

Carolyn Thomason, executive vice president at First Federal Bancshares of Arkansas Inc., made nearly $250,000, up from $215,000 in 1996. Her ranking, however, fell from 50th to 53rd on the list.

New to the list is Debbie Branch, a senior vice president at Southwestern Energy Co. She earned nearly $329,000, enough to land her in 40th place on the list.

StaffMark Inc. executives’ compensation has soared along with the company’s stock. Clete Brewer, president and CEO, earned more than $282,000, up from $43,000 in 1996 and enough to place 46th on the list.

Close behind Brewer were some of his colleagues: Terry Bellora, chief financial officer, $263,000 and 49th on the list; Ted Feldman, chief operating officer, $250,000, 51st place; Donald Marr, executive vice president, $230,000, 54th place; and David Bartholomew, executive vice president, $222,000 and 57th place.