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CEO Pay in Florida

Let’s be honest. We love to know what people make.

Now, thanks to a federal mandate taking effect this year, we know a lot more about what people at Florida’s largest companies earn.

The insights come via Dodd-Frank, the recession-era financial regulation makeover legislation. Amid its voluminous pages lies a requirement that public companies disclose how much CEOs make compared to the median income earned by employees. The median is a figure at which half of the workers make more and half make less.

The backstory is that for years politicians and advocates had made a talking point out of saying CEOs make 300 times what workers do. Dodd-Frank required companies to bring their CEO pay ratios into the light. To do that, a company also has to disclose the income of its median employee.

In Florida, the CEO multiples range from five times median pay at Jacksonville developer and materials mining lessor FRP Holdings to 1,465 times enjoyed by Mohammad Abu-Ghazaleh, CEO of Coral Gables-based fruit supplier Fresh Del Monte Produce, who makes more than $8.5 million.

If some hoped that a company’s disclosure of a high multiple would shame the firm or spark a shareholder uprising, those hopes haven’t been realized. Luis Navas, senior partner in Miami and cofounder of Global Governance Advisors, a firm that assists companies in setting executive pay and board governance issues, says company boards and institutional shareholders don’t see what the multiple has to do with attracting and retaining CEO talent and with corporate performance, “which is really what shareholders care about.”

Retail investors, Navas says, “react more to a dollar value rather than a ratio and, even then, if their investment’s share price performs well, they are less concerned about pay levels.”

Since we’ve known for decades what CEOs make, the most critical piece of new information is what the median pay is — letting workers know exactly how their pay compares to their company’s median. Employees earning less than the median may have questions. “There’s going to be some of that,” says Cheryl Wilke, partner-in-charge of the Fort Lauderdale office of law firm Hinshaw & Culbertson.

Indeed, in advance of the disclosure requirement taking effect, Pasadenabased executive compensation and corporate governance adviser Farient Advisors created a checklist for companies to follow that included prepping human resources departments to deal with employee questions about pay.

However much the disclosures say or don’t say about CEO pay vs. workers’, they can provide plenty of insight into how companies structure their operations, how much they depend on foreign labor and how skilled workers are.

At Florida-based companies, for example, the highest median employee income — $228,114 — is at Orlando-based Xenia Hotels & Resorts, owner of the Hyatt Regency Grand Cypress and Grand Bohemian Hotel in Orlando and 36 other hotels nationally. But the company isn’t paying housekeepers that kind of money — the median employee income applies only to the 51 people Xenia employs directly. All the hotel workers get paid by the management companies Xenia contracts to run its hotels.

Apples and oranges

Wilke warns of the danger of trying to compare median salaries and ratios among companies. Even “within an organization it can be apples to suspenders,” she says.

The U.S. Securities and Exchange Commission granted companies leeway in how to establish a median income. Companies could decide whether to annualize for part-year employees, whether to exclude a certain percentage of foreign workers, whether to include company-paid health care premiums and whether to make costof- living adjustments for foreign workers.

“I think it’s very difficult to make a comparison without knowing what was included and what was excluded in the calculation,” says Farient partner John Trentacoste. “It becomes interesting, but the relevancy factor may not be fully there.”

Some pairings, however, are inevitable. At NextEra, parent of utility FPL, CEO James Robo’s salary, $18.8 million, is 155 times the company median. At Duke Energy, CEO Lynn Good earns 175 times the median.

Another logical pairing: The median employee income at Royal Caribbean is $18,320, in the bottom five for a Floridabased employer. The company said that figure doesn’t include room and board that’s provided “without charge” to employees on ships and doesn’t include cash tips, though it does include billed gratuities. CEO Richard Fain was paid 728 times the median. At Norwegian Cruise Line Holdings, CEO Frank Del Rio’s pay was 514 times the median.

Devil in the details

In the accompanying chart (next page), Florida Trend lists the median income and multiple for the public companies in our annual Florida 350 who filed proxies by early May. Companies that responded to Florida Trend inquiries typically said they had no comment beyond the required disclosure. In their annual proxies, some companies issue only the barebones disclosure while others, depending on how much they feel they need to explain, provide more detail.

In some cases, there are lots of details. Take the case of West Palm Beach-based mortgage servicing company Ocwen Financial, which employs 530 in Florida. Ocwen reported that CEO Ronald Faris received 72 times the company median employee income of $31,283. Ocwen additionally said it determined its median employee worked in Bangalore, India, and was paid in rupees. Along with a currency conversion, Ocwen elected to make a cost-of-living adjustment. Had it not done so, the company median would have been $10,164 and Faris’ multiple 221, Ocwen reported. Among just U.S.- based workers, however, Ocwen said its median compensation was $66,462, taking Faris’ multiple down to 34.

Fresh Del Monte, meanwhile, said its median employee turned out to be in Costa Rica and earned $5,833, the lowest median employee income at a Floridabased company. Fresh Del Monte says 80% of its 39,089 employees work in Costa Rica, Guatemala, Kenya, the Philippines and 33 other countries.

Orlando-based Tupperware, the sixthlowest in median employee income, disclosed that 95% of its employees live abroad, with 83% in emerging countries. Seminole-based Superior Group revealed that while its median employee companywide earned $9,640, giving CEO Michael Benstock a multiple of 313, the median for U.S. workers was $28,027, which put Benstock’s multiple compared to U.S. workers at 108.

Florida has a share of companies that clearly pay well. Alachua-based nerve repair company AxoGen’s median employee income stood at $83,506. “As a company focused on the science, development and commercialization of medical technologies, we have a unique base of highly skilled and educated employees and are proud to compensate them accordingly,” the company says. CEO Karen Zaderej earned 45 times her company’s median.

Observers say they wouldn’t be surprised to see more pay disclosure mandates in coming years. Wilke says that the disclosures have stirred discussions about fair pay and pay equality. Companies who study their in-house data and feel they have a good story to tell about pay parity among genders or races may voluntarily put it out there. Legislators may demand that all do it. Meanwhile, the United Kingdom now mandates a gender equity pay disclosure.

CEO Pay vs. Median Employee Salaries (Ranked by median pay)
Company Median Pay CEO Pay Chief Executive
Xenia Hotels & Resorts $228,114 $5,730,446 Marcel Verbaas
Consolidated-Tomoka Land 139,755 1,434,775 John P. Albright
NextEra Energy 121,355 18,811,693 James L. Robo
Citrix Systems 118,631 10,321,289 David J. Henshall
FRP Holdings 101,104 499,375 John D. Baker
CSX 98,697 2,647,933 James M. Foote
Regency Centers 94,802 5,591,771 Martin E. Stein Jr.
National Retail Properties 91,681 4,851,793 Julian Whitehurst
Ultimate Software Group 91,613 31,470,785 Scott Scherr
Rayonier 91,294 3,713,047 David Nunes
Mednax 91,192 7,365,508 Roger J. Medel
Chatham Lodging Trust 89,938 4,027,279 Jeffrey H. Fisher
Black Knight Financial Services 89,851 7,147,086 Tom Sanzone
St. Joe 87,981 894,911 Jorge Gonzalez
AxoGen 83,506 3,704,972 Karen Zaderej
Rayonier Advanced Materials 83,104 7,972,007 Paul G. Boynton
Roper Technologies 82,543 29,181,078 Brian D. Jellison
ACI Worldwide 82,367 6,120,624 Philip G. Heasley
United Insurance Holdings 81,663 2,347,232 John L. Forney
BankUnited 80,354 4,718,572 Rajinder P. Singh
Herc Holdings 78,553 4,187,084 Lawrence H. Silber
WellCare Health Plans 78,139 11,344,738 Ken Burdick
Universal Insurance Holdings 74,179 19,252,897 Sean P. Downes
MasTec 71,633 6,753,557 Jose R. Más
NeoGenomics 69,825 3,483,508 Douglas M. VanOort
Vector Group 69,597 10,633,932 Howard M. Lorber
Brown & Brown 63,058 4,629,634 J. Powell Brown
SBA Communications 62,949 8,205,344 Jeffrey A. Stoops
Overseas Shipholding Group 61,072 1,535,684 Samuel H. Norton
Ladenburg Thalmann Financial Srvs 60,970 2,366,410 Richard Lampen
Goldfield 60,274 954,524 John H. Sottile
Seacoast Banking $59,455 $1,512,516 Dennis Hudson III
Faro Technologies 58,425 2,464,725 Simon Raab
Federated National Holding 57,241 2,964,533 Michael H. Braun
RTI Surgical 55,755 6,984,321 Camille I. Farhat
World Fuel Services 55,741 5,508,381 Michael J. Kasbar
Advanced Disposal Services 55,102 3,829,281 Richard Burke
Hemisphere Media 54,074 1,737,630 Alan J. Sokol
Tech Data 53,421 7,337,307 Robert M. Dutkowsky
Sun Hydraulics 52,290 958,836 Wolfgang H. Dangel
Seacor Holdings 51,750 5,269,135 Charles Fabrikant
Fidelity National Financial 51,464 8,961,216 Raymond R. Quirk
Gencor Industries 50,975 463,138 John E. Elliott
Platform Specialty Products 50,500 5,888,026 Rakesh Sachdev
TopBuild 50,145 3,829,247 Jerry Volas
Watsco 50,054 8,165,796 Albert H. Nahmad
FCB Financial Holdings 49,717 9,466,071 Kent S. Ellert
Cott 46,924 6,188,730 Jerry Fowden
AutoNation 45,543 12,186,944 Michael J. Jackson
HCI Group 45,088 4,130,557 Paresh Patel
CenterState Banks 44,911 2,088,108 John C. Corbett
Fidelity National Information Srvs 44,556 29,141,610 Gary Norcross
Ryder System 44,344 6,137,757 Robert E. Sanchez
Landstar System 43,864 4,434,676 Jim B. Gattoni
Web.com 43,372 5,647,928 David L. Brown
Welbilt 40,836 3,704,480 Hubertus M. Muehlhaeuser
PGT 40,523 1,795,279 Rodney Hershberger (retired)
Masonite International 39,392 4,172,550 Frederick J. Lynch
Opko Health 38,661 970,800 Phillip Frost
ILG 36,628 5,337,860 Craig M. Nash
Spirit Airlines 36,149 2,238,356 Robert L. Fornaro
GEO Group 35,630 9,664,433 George C. Zoley
Kforce 32,015 3,078,952 David L. Dunkel
Ocwen Financial 31,283 2,245,301 Ronald M. Faris
Office Depot 30,977 17,087,714 Gerry P. Smith
Hertz 30,645 8,046,260 Kathryn V. Marinello
Cross Country Healthcare 26,006 2,664,509 William J. Grubbs
BBX Capital 25,560 10,064,986 Alan B. Levan
Norwegian Cruise Line Holdings 20,428 10,494,213 Frank J. Del Rio
Tupperware 20,290 7,247,764 E.V. Goings
Royal Caribbean 18,320 13,343,413 Richard D. Fain
Sykes Enterprises 10,450 4,239,837 Charles E. Sykes
Superior Group of Companies 9,640 3,021,167 Michael Benstock
Chico's FAS 7,495 8,381,456 Shelley G. Broader
Fresh Del Monte Produce 5,833 8,543,343 Mohammad Abu-Ghazaleh

 

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