LI exec raises averaged 4.2% in 2010

The boss got a raise at public companies on Long Island in 2010 -- though far less than counterparts around the United States.

The typical president, chief executive or other high-level corporate officer in Nassau and Suffolk counties took home 4.2 percent more in 2010 than a year earlier, according to a Newsday analysis of compensation data filed with federal securities regulators.

In contrast, pay increases for executives at all companies whose shares are traded on U.S. exchanges averaged 14.8 percent year over year, according to S&P Capital IQ, a data and analysis business of the McGraw-Hill Cos. that supplied numbers for this report. The pay data for local executives are derived solely from Long Island companies. Some executives received additional pay from businesses not based here.

Local executives' average compensation of $1.23 million in 2010 also trailed the $1.67 million paid to their counterparts nationwide.

And yet, by some measures, Island companies outperformed most companies traded on U.S. exchanges. Average profit climbed 90 percent locally, versus 53 percent across the country, according to data from S&P Capital IQ. Sales were up 15 percent and 12 percent, respectively.

The smaller raise for Nassau-Suffolk executives stems largely from the paucity of very large corporations here. The biggest businesses, whose pay packages sway average compensation figures, tend to have the resources and the cultures that more lavishly reward leaders.

"You definitely see a difference from the largest, most well-known and widely traded companies in how they deal with pay versus small companies that have controlling owners or stock that is thinly traded," said Marc R. Ullman, a New York-area compensation consultant at the human resources firm Towers Watson.

Long Island "consists largely of small businesses," said Irwin Kellner, a retired Hofstra University professor of economics and now chief economist at the MarketWatch news service. "There are only a couple of Fortune 500 companies here, so that impacts the overall compensation numbers."

Only 3 on Fortune's list

Three of the area's 79 active public companies in 2010 -- Arrow Electronics Inc., Henry Schein Inc. and Cablevision Systems Corp. -- made Fortune magazine's list of the largest. Arrow last month moved its headquarters from Melville to a Denver suburb.

Executive compensation has become a touchstone issue recently, as top officers' pay soars while the middle class loses ground. Pay packages, particularly for those working at banks and investment houses, have triggered angry protests from the Occupy Wall Street movement.

Compensation is also attracting attention because of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which permits shareholders for the first time to vote on advisory "Say on Pay" resolutions. Still, the vast majority of 2010 pay packages have been ratified.

"Scrutiny of pay is increasing," said Ted Jarvis, research director for executive compensation at Mercer human resource consultants. "There's a lot of attention right now, and I don't think it's going to go away."

On Long Island, the 2010 earnings of top executives rose faster than those of all workers.

On average, workers' pay climbed 2.8 percent last year from 2009, according to the state Department of Labor. That compares with 4.2 percent for top corporate officers. The typical local worker earned $52,359 last year -- just 4 percent of the average pay given to high-echelon corporate officers.

Every year, public companies disclose some executives' pay packages -- usually for the chief executive, chief financial officer and the three other highest-compensated executive officers -- to the U.S. Securities and Exchange Commission.

Last year, compensation committees of some local corporate boards loosened their purse strings as losses swung to profits and stock prices rebounded from the 18-month recession that many economists say ended in June 2009. Of 319 leading executives, the number earning $2 million or more grew by nine last year to 46.

Marquee businesses such as CA Technologies, New York Community Bancorp, Pall Corp. and Cablevision continue to dominate Long Island's top echelon of executive pay.

The 2010 ranking is virtually unchanged from a year earlier, with Cablevision executives occupying the top four spots. The company owns Newsday.

The top earner is Cablevision chief operating officer Thomas M. Rutledge, who was paid $28.2 million last year, a gain of 8 percent. The increase came from a one-time stock award and special retirement benefit under an employment contract signed in December 2009.

The Bethpage company's profits climbed 26 percent in 2010 from a year earlier, and it added 300,000 cable subscribers in the western United States with the purchase of Bresnan Communications. The stock appreciated more than 58 percent.

Cablevision's executive compensation was "fully appropriate," said company spokeswoman Kim Kerns, because "Cablevision performed extremely well in 2010, generating solid revenue growth and record free cash flow, while also taking dramatic steps to create shareholder value."

New entry in LI top 10

The only new entry to the top 10 was William E. McCracken, chief executive of CA Technologies in Islandia, who placed No. 6 with pay of $8 million. That's a 114 percent jump from 2009 as he moved to the top job at the software company in January 2010, said CA spokeswoman Jennifer Hallahan.

Of the 319 senior executives included in the Newsday survey, more than five in 10 saw their compensation increase last year. McCracken had the biggest dollar raise: almost $4.3 million.

Among those earning less, Cablevision vice chairman Hank J. Ratner had the biggest dollar reduction: about $4.6 million. His total compensation was almost $11.6 million last year.

However, Ratner and Cablevision chief executive officer James L. Dolan also received paychecks from the Madison Square Garden Co., which Cablevision spun off in February 2010. MSG is based in Manhattan.

The compensation of most Cablevision executives was reduced by changes to long-term incentive awards between 2009 and last year, and by a cash payment received in 2009 as part of a deferred compensation plan.

Almost six in 10 executives of public companies on Long Island that lost money in 2010 had smaller pay packages than in 2009. Similarly, the compensation of seven in 10 was aligned with shareholder interests, meaning it did not exceed the company's stock performance.

Nationwide, "shareholders are demanding pay for [company] performance," said Bruce R. Ellig, author of "The Complete Guide to Executive Compensation" and an adviser to corporate boards. "They don't want to see an executive getting paid very handsomely when there are losses or the stock price tanked."

Sometimes, though, pay goes up despite falling stock prices and declining -- or no -- profits.

Ezra Green, head of Clear Skies Solar Inc., was No. 10 on the list of biggest dollar raises on Long Island, earning $2.3 million last year, a gain of $946,408, or 70 percent, from 2009. During the same period, stock in Clear Skies lost 84 percent of its value, and the Mineola company's loss widened to $9.7 million.

Green said Clear Skies barely survived the recession but has recently received record orders for its solar energy systems. Sales totaled $5.5 million in 2010, rebounding from $195,000 a year earlier.

"I pulled it out of the toilet," he said. "I've been able to get extraordinary strides done with a company that was beaten down into the ground."