Sponsored by Oregon Business

2012 CEO pay report

| Print |  Email
Articles - October 2012
Monday, September 24, 2012

Stock and option awards have proliferated since the 1990s.

This is evident with our sampling of Oregon CEOs: For the first time in five years, possibly longer, stock awards accounted for more pay (38%) than options (17%) and are the largest component.

With so much of it valued in stock, it’s no surprise that CEO pay rises and falls, often in tandem with the company stock price. Stock and option awards accounted for 63% of Equilar’s S&P 500 CEO pay in 2011, and 55% of the 20 Oregon CEOs' pay, up from 43% in 2007.

Restricted stock, subject to vesting periods or other conditions, and performance shares, subject to meeting performance targets, have risen in proportion to options, notes Lindner, after an accounting change in the early 2000s made companies expense option grants the same as stock. Prior to that, options were most of the equity in CEO pay.

14 top 20 CEOs received an increase in total pay this last fiscal year.

CEOs who received less included Precision Castparts’ Mark Donegan, Columbia Sportswear’s Tim Boyle, Mentor Graphics’ Walden Rhines and Umpqua Bank’s Raymond Davis, all companies whose annual net income grew.

Notably, Mentor Graphics faced pressure in recent years from well-known activist investor Carl Icahn, who got three of his nominees elected to the board. But Rhines has led the company back to profitability the past two years, and Mentor’s board has managed to fend off Icahn’s attempts to shake it up, replacing two of his picks this year.

All 20 companies passed their most recent “Say on Pay” votes.

One of the first rules to be enforced from 2010’s Dodd-Frank Act requires companies to hold nonbinding "Say On Pay" votes at annual shareholder meetings, asking investors to OK executive comp plans. This year, Columbia Sportswear had the highest pay approval, 99.6%, while Greenbrier and Schnitzer Steel had the lowest, 52.1% and 58.6%.

Boyd thinks that Say on Pay has had a positive impact on company engagement with shareholders, particularly larger institutional investors. “For the most part they all like it,” he says, “and I think companies are finding value in it. What it’s doing is really opening up the dialog between companies and shareholders.”

CEO pay may be an issue to some investors, but not all. George Hosfield, the chief investment officer of Portland-based Ferguson Wellman Capital Management, which manages more than $3 billion in mostly large-cap equities, says this is not a criterion by which he screens companies. “We’re more concerned with CEO competence than we are the compensation,” he says.

Hosfield says that “the more transparency, more sunlight, the better as a general sense,” but he also worries that the cost of regulations like Say on Pay could hurt performance, especially at smaller companies less able to absorb the cost. “Regulation with respect to how costly and burdensome it is as an impediment to business has gone up exponentially in the last decade.”

The prospect of more Dodd-Frank and other regulations hitting small companies could make it a little tougher for our CEOs to do their job and for boards to govern them. But greater regulation has boosted communication between executives, boards and shareholders, as well as cast much more light on CEO pay. At least for now, the majority of the 20 companies we tracked are making a bigger profit and rewarding their CEOs with a bigger paycheck.

Brandon Sawyer is the research editor of Oregon Business. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .


More Articles

Photos: 100 Best Nonprofits to Work For in Oregon awards dinner

The Latest
Thursday, October 01, 2015
100best202thumbPHOTOS BY JASON E. KAPLAN

Images from the big 2015 celebration of worker-friendly organizations that make a difference.


Storyteller in Chief: Brew Stories

October 2015
Monday, September 28, 2015

Over the years, many mentors have taught me lessons that have helped shape the way I view the world of work and our business.


Living the dream

Friday, August 21, 2015

smugglespearsthumbRenee Spears, founder and owner of Portland-based Rose City Mortgage, is hot to trot to sell pot.


Getting What You Pay For

September 2015
Wednesday, August 19, 2015

A conversation with Chris Maples, president of the Oregon Institute of Technology.


Aim High

September 2015
Thursday, August 20, 2015

We get the education we deserve.


More Than Meets the Eye

Guest Blog
Tuesday, September 22, 2015
Janet Yellen official Federal Reserve portrait-thumbBY JASON NORRIS | CFA

On September 17, the much anticipated Fed decision was delivered and the equity markets haven't liked it.


Business School

September 2015
Wednesday, August 19, 2015

Training, from the mundane to the sublime, bolsters companies and workers in an uncertain world.

Oregon Business magazinetitle-sponsored-links-02