How much do they make?

By Dick Hughes  

DECEMBER 30, 2009 5:23 a.m. (0)

Top executives of most of South Carolina’s publicly traded companies are taking a hit in compensation as the recession reduces corporate profits and performance bonuses – but not necessarily their perks.

A review of regulatory filings of 33 companies shows compensation for 19 chief executive officers was cut in 2008. Without exception, the reductions accompanied erosion in profitability or losses.

Base salaries generally were flat or up slightly on contractual increases. The CEOs took the hit on cash bonuses and stock incentives based on performance.

By and large, their perks were untouched. These benefits typically include deferred compensation contributions, health, life and disability insurance, medical exams, car allowances, club dues and financial planning services. Personal use of corporate aircraft is allowed by a few of the bigger companies.

Because the IRS limits 401k contributions, companies bump up retirement plans with deferred compensation.

Companies also are using a variety of stock forms as compensation to avoid exceeding the IRS salary limit of $1 million per individual as a corporate tax deduction.

The examination of proxy statements, which are required by the Securities and Exchange Commission ahead of annual meetings, was conducted from a list of publicly traded companies compiled by the South Carolina Department of Commerce. The Journal used the total compensation records from these proxies.

The CEO taking home the biggest paycheck last year was Mack I. Whittle Jr., 61, of The South Financial Group, the Greenville holding company for Carolina First Bank and Mercantile Bank in Florida.

Whittle’s total compensation for 2008 was $15.8 million, but that number is way out of whack as an annual measurement because it includes money and benefits owed Whittle under his employment contract when he was forced to retire Oct. 27.

The payout included about $12 million in three years of salary and bonuses, deferred compensation, stock incentives and other benefits.

Without that, Whittle’s compensation for the year would have been less than the $4.7 million he was paid in 2007 because salaries had been frozen and bonuses cancelled for 2008.

TSFG is the state’s largest financial company and, based on losses, its most troubled.

TSFG lost $569 million last year and $202 million in the first six months of 2009, though it has strong capital and liquidity.

Several companies finished the year with profits, albeit at lower levels, and four increased profits. Except for one, compensation for their CEOs rose. In a few cases, CEOs got bigger paychecks despite producing lower profits.

W.B. Timmerman, 62, of Scana Corp. of Columbia, holding company for South Carolina Electric & Gas, got an 85 percent bump. Benefiting from a $3-million increase in stock awards, his reported compensation was $6.8 million, up from $3.9 million. Scana’s net income rose 6 percent to $340 million.

Michael L. Bauer, 52, of Greenville-based ScanSource received $3.5 million for the fiscal year ended June 30, 2008, up from $2.9 million. Bauer’s base salary was unchanged at $700,000; the increase came from higher option awards, cash incentives and a $200,000 contribution to a deferred compensation plan.

The company’s net income for that period rose from $42.6 million to $55.6 million. For the latest year ended June 30, 2009, net income fell to $47.7 million. (Executive compensation for the comparable year was not readily available.)

Net income of Greenville’s Span-America Medical Systems, a supplier of medical and consumer products, rose 60 percent for its fiscal year ended Sept. 27, 2008, to $4.9 million. Still, the company paid no cash bonuses that year, and compensation for CEO James D. Ferguson, 51, declined from $441,820 to $316,367.

For the fiscal year ended March 31, A.A. McLean III of Greenville-based World Acceptance Corp., was paid $1.5 million compared to $1.4 million the prior fiscal year; during that period, net income increased from $53 million to $61 million. The company makes small loans to consumers and has other financial services.

Roughly 75 percent of McLean’s compensation was in performance awards in stock and options, deferred compensation and perks.

World Acceptance extends the same incentive programs to regular employees; 88 percent of the options and 6 percent of the restricted stock awards in fiscal 2009 went to employees who are not executive officers.

Compensation for Kenneth Compton of Advance America of Spartanburg, the payday loan company, increased from $2 million to $2.2 million while the company’s net income dropped from $54.4 million to $38.5 million.

Compton received $619,712 in salary, $400,000 as a cash bonus, stock awards and options valued at $1.1 million and $46,000 in other benefits. The latter comprises 12.1 flight hours valued at $22,875 for personal use of the company’s leased plane, $18,688 to reimburse him for income taxes paid on use of the plane in 2007, and $5,082 for premiums on a life insurance policy.

Most CEOs saw their income drop.

Per-Olof Loof, 58, of Kemet Electronics of Simpsonville, took one of the biggest hits, as did the company. His compensation for the fiscal year ended March 31, was $851,591 compared to $2 million the prior year. The company lost $25.2 million in fiscal 2008 and $285 million in fiscal 2009.

Norman J. Marchioli, 59, of Spartanburg-based Denny’s Corp., earned $2.6 million in 2008, $600,000 less than the prior year, as Denny’s net profit declined from $31 million to $15 million.

Synalloy Corp. of Spartanburg, a maker of pipe and piping systems, paid Ronald H. Braam, 65, $404,817 last year, half his 2007 compensation. Braam’s base salary was unchanged at $200,000 but his incentive and stock awards were reduced substantially. The company’s 2008 net income of $6 million was off 40 percent.

With the recession devastating real estate portfolios, bankers especially saw their income erode.

Jerry Calvert’s compensation at First National Bancshares of Spartanburg, where he was CEO for the bank’s entire 10-year history, declined $50,000 to $325,000 as the bank went from $4 million in net profit to a $44.5-million deficit.

Calvert, 60, was replaced last month – voluntarily, the bank said – by Barry Mason, 49, who was awarded a salary of $275,000, a signing bonus of $500,000 and a chance to earn $200,000 if he meets the bank’s capital goals and $137,000 by meeting annual goals.

William G. Stevens, 64, of Community Capital Corp. of Greenwood, earned $792,577 in 2007 when net Community Capital’s net income was $6.9 million. In 2008, he received $654,419 when net income fell to $2.4 million.

Net income of Southern First Bancshares of Greenville, the holding company for Greenville First and Southern First banks, declined to $2.9 million from $4.9 million, and R. Arthur Seaver Jr., 45, earned $392,225, $25,000 less than in 2007.

With profits dropping at Palmetto Bancshares of Greenville and Laurens from $16 million to $13.6 million, 68-year-old L. Leon Patterson’s compensation was reduced 15 percent to $501,000.Like other companies, Palmetto is cutting back on 2009 bonuses and perks.

A banker who did well was Robert R. Hill Jr. of SCBT Financial Corp of Columbia, which distinguished itself by being among the first small banks to pay back the U.S. Treasury for TARP funds it received in late 2008.

SCBT had net income of $15.8 million in 2008, down from $21.6 million, and Hill’s compensation rose from $698,757 to $718,125.

The lowest compensated CEO among publicly traded companies is Mason Y. Garrett, 66, of GrandSouth Bancorp, one of the smaller banks. Garrett earned $139,311 in 2007 and $135,000 in 2008. Upon his recommendation, the board increased base salaries of other executives for 2009 but kept his at $100,000. GrandSouth finished 2008 with net income of $1.3 million, half what it recorded in 2007.

The only female CEO of the publicly traded companies listed by the state is Nancy Hedrick, 59, of Computer Software Innovations of Easley, which sells software and hardware to schools, other government entities and to nonprofits.

The company is unique in that Hedrick and the three vice presidents receive identical base salaries of $194,859 and are treated identically on bonuses, which meant $19,425 each in 2007 but zero in 2008.

CSI had net income of $1.7 million in 2007 and $1.3 million last year. But 2009 has been a tough year. In the first six months, the company ran a deficit of $435,000, and it has reported being in default on a major debt.

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