The 10 highest-paid plastics processing executives made their money in a lot of ways. Some exercised stock options, one received stock grants as an end-of-career motivation and some got golden parachutes for leaving when companies merged. One even saw his pay drop, yet he retained his slot in the top 10.
Keep in mind that the figures reported as income in company filings to the Securities and Exchange Commission may not always translate exactly into cash in hand, however. For example, the category for value realized from stock purchases is sometimes a paper profit. It's calculated when the executive exercises a stock option, buying shares at the option price but not necessarily selling them. The company reports to the SEC what the executive would make if the shares were sold. It is actual income the executive could gain - Plastics News does not count the value of stock options that have yet to be exercised. The data also includes payments to retirement plans and other perks, like company cars and club memberships.
John Roe, chairman and chief executive officer of packager Bemis Co. Inc., topped the list with $8.1 million in 2000. More than half of that came in the form of a $4.1 million restricted stock award given under a company program for senior executives approaching retirement. In 1998, Bemis began giving its top executives a stock award equal to five times their typical award, when they near their 60th birthday. It's designed to be the last stock award the executives receive.
Bemis explains it this way: ``In December 1998, the committee also decided that the company and the senior executives would be best served by a program which provided a significant incentive to the senior executive late in his/her career and a vehicle for an amicable parting should the senior executive `stay on' when his/her effectiveness had diminished.'' Company officials could not be reached for comment.
The next two spots on the top 10 come from plastic sheet maker and compounder Spartech Corp. David Mueller, former executive vice president and chief operating officer, was No. 2, followed by Bradley Buechler, chairman, president and CEO.
Mueller pulled in $6.1 million, more than 80 percent of that from exercising stock options he picked up during his career with the Chesterfield, Mo.-based company. Mueller left the firm in a management restructuring in November, but it will not be the end of his paychecks from Spartech. He will receive $545,000 a year through 2005, for consulting with the company on certain issues and agreeing not to compete with the firm at new jobs, according to SEC filings. That is 20 percent more than his last annual salary with Spartech. Mueller now is director of Fortune Group LLC, a Clayton, Mo.-based investment banking firm.
Buechler pulled down $5.6 million, with $4.1 million coming from gains from exercising stock options.
The company said it had strong results - earnings-per-share growth of 16 percent and return on equity grew 25 percent. Investors did not fare as well: One-year return to shareholders plummeted 52 percent in the fiscal year, and 35 percent in calendar year 2000.
Two PolyOne Corp. executives made the top 10 of this year's ranking because of severance packages associated with the merger of Geon and M.A. Hanna in September. Donald Knechtges, a former Geon executive, took home a $2.6 million payment because he did not keep his job in the merger. His agreement with Geon called for a payment of three times his annual salary and bonus targets, plus some additional benefits. Garth Henry, a former Hanna executive, received a $1.7 million severance agreement after he left the company in January.
The top 10 contained only two companies whose stock rose in value in 2000. The biggest stock gain came at composites manufacturer Hexcel Corp., where former Chairman and CEO John Lee took home $2.6 million. The cash portion of Lee's pay rose dramatically in 2000, with his salary and bonus increasing 99 percent to more than $1.2 million. The company's one-year return to shareholders grew 60 percent. Hexcel shifted more money to cash compensation in 2000 because it relied more heavily than usual on stocks in 1999 when cash flow was tight, company officials said. Lee died of cancer in May.
Tupperware is the other company in the top 10 to show shareholder gain in 2000. Chairman and CEO E.V. Goings reported a little more than $2 million in income. He got a 5.5 percent raise in salary, the first in two years, and his bonus went from $751,000 in 1999 to $915,000 in 2000 because the company's profit grew 9 percent, excluding restructuring costs. Goings' income also includes $427,000 that is reported as pay because it is interest he does not have to repay from a company loan to buy Tupperware stock.
The single Canadian executive in the top 10, Vic De Zen of Royal Group Technologies Ltd., made US$2 million last year, in spite of the cash portion of his pay dropping 35 percent. The company's return to shareholders fell 39 percent. De Zen owns a controlling interest in Royal. The company has an unusual pay plan: Base salaries for senior executives have remained constant since 1994, and the firm relies on large cash bonuses linked to earnings before interest, taxes, depreciation and amortization, as well as stock options.
Two other Bemis executives made the top 10. President Jeffrey Curler, who took over as CEO from Roe in May 2000, made $3.6 million, with half of that from exercised stock options. The other Bemis executive, senior Vice President Scott Johnson, earned $2.5 million in 2000; a little less than half came from a pre-retirement award similar to Roe's.