Officers at Wal-Mart and Tyson Foods were the highest paid public company executives in Arkansas last year, with the top three earning more than $19 million each.
Gregory Foran, who was hired last year to run Wal-Mart's U.S. operations, was the highest-paid executive in the state, making $19.5 million in 2014. John Tyson, Tyson Food's chairman, made $19.3 million and Doug McMillon, Wal-Mart's chief executive officer, made $19.1 million.
The information was taken from the most recent proxy statements of 19 publicly traded companies in Arkansas. A proxy statement, sent to stockholders every year to notify them of the timing for the annual meeting, includes details of business to be conducted at the meeting and the income of the company's top executives.
The Arkansas Democrat-Gazette calculates executive compensation using The Associated Press' formula of adding salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and grants awarded during the year.
The incomes for the top three executives on the list are comparable with other companies nationally, said Joshua Henke, executive director for Longnecker & Associates, an executive-compensation consulting firm in Houston.
"Certainly for the size of Wal-Mart and Tyson, it is not out of line," Henke said. "In Houston and Dallas, there were several executives who made more than [$19 million] last year."
Other examples of top incomes at national firms include Boeing chief executive Jim McNerney, who earned almost $29 million last year; Target chief executive Brian Cornell, who made more than $27 million; and former Ford chief executive Alan Mulally, who earned $22 million.
Despite the lofty incomes, Tyson and McMillon took cuts in pay from 2013. Tyson earned $20.5 million in 2013 and McMillon made $25.3 million.
In all, the 91 executives on this year's list earned more than $284 million, down 7.5 percent from about $307 million that 88 executives made on last year's list. The highest total earned by the top officers at Arkansas public companies was $720 million in 2007, when six Alltel Corp. executives accounted for about 70 percent of the total pay.
Nationally, the largest 200 companies in the country reported a 3 percent to 4 percent increase in pay for chief executive officers, Henke said.
But the top 100 executives for public companies in Houston saw a 4 percent decrease in income in 2014, Henke said. A significant portion of Houston companies are energy firms, which have struggled recently because of low oil and natural-gas prices.
"It has been long-term incentives, such as stock and option awards, that have decreased a little bit," Henke said. "That is the main bucket for compensation for these executives."
For the Arkansas executives, there was about a 1.5 percent decline in stock and option awards in 2014 from the previous year.
Seven Arkansas executives earned more than $10 million on this year's list. Sixty-nine had total income of more than $1 million.
Richard Massey, the chairman and acting chief executive officer at banking firm Bear State Financial, took no pay last year. Massey, however, owns Bear State shares worth almost $177 million. That's about 58 percent of Bear State's stock.
The median pay for the 91 officers on the list was $1,733,106 -- meaning half made more and half made less.
The average income of the 91 executives was about $3,125,000. It would take about 140 years for an Arkansan making the state's average per-capita income of $22,170 to match the average pay of the executives on this year's list.
Combined, the executives own more than $2.8 billion in stock, down 6.7 percent from the $3 billion owned by executives on the list last year.
One of the most important indicators for an investor to consider is how well a company's stock has improved over the past five years, Henke said.
Dillard's Inc. has had the best return on a five-year, $100 investment among the Arkansas public companies. A $100 investment in Dillard's at the close of its fiscal year in 2010 had risen to $740 by the end of the firm's fiscal year this year.
"In late 2009 and early 2010, people were just starting to feel confident that the economy might turn around," said Bob Williams, senior vice president and managing director of Simmons First Investment Group Inc. in Little Rock. "Ultimately that led to greater consumer confidence. That made retailers look better [as an investment] and played out in Dillard's stock appreciation."
Two other Arkansas companies had a five-year return on their stock above $500 -- P.A.M. Transportation at $601 and Bank of the Ozarks at $562.
The proxies, which are filed with the U.S. Securities and Exchange Commission, also include other profitable arrangements between some of the Arkansas companies.
El Dorado-based Murphy Oil Corp., which became a public company in 1983, has spun off two other Arkansas public companies -- Deltic Timber Co. and Murphy USA, which also are based in El Dorado. Deltic was spun off in 1996 and Murphy USA in 2013.
Five first cousins and the spouse of a sixth first cousin serve on the three boards.
Directors include R. Madison Murphy, Claiborne Deming, Christoph Keller, Robert Nolan and Caroline Theus, who are first cousins. Hunter Pierson Jr. is also a director and is married to a first cousin of the others.
Murphy sits on all three boards, and Deming and Keller are on two.
According to the Deltic proxy, more than 100 individuals covering four generations of the extended family own about 26 percent of Deltic, worth about $215 million.
The Dillard family dominates Dillard's Inc. stock.
Brothers William, Alex and Mike Dillard together own almost 4 million shares and more than 99 percent of the company's Class B stock. The three, with their sister Drue Matheny, also own more than 9 percent of the retailer's Class A stock, making them the second-largest owner of Class A shares behind Evercore Trust Co. of New York, which owns 24 percent.
In addition, Denise Mahaffy, sister of William, Alex and Mike Dillard and Drue Matheny, earned a salary and bonuses of $700,000 last year as a company vice president.
William Dillard III, vice president and son of the company's chief executive officer, made $715,000 in salary and bonuses last year.
Alexandra Dillard, a divisional merchandise manager and daughter of Alex Dillard, made $265,000 in salary and bonuses in 2014. Her sister, Annemarie, a company manager, earned $210,000 in salary and bonuses last year.
Warren Stephens, a Dillard's director and owner of Little Rock-based Stephens Inc., indirectly owned more than 10 percent in Halifax Media Group last year. Halifax received about $2 million in advertising fees from Dillard's last year.
Dillard's also paid $235,000 last year in advertising fees to Northwest Arkansas Newspapers LLC, in which Stephens owned more than 10 percent.
Heirs of Wal-Mart founder Sam Walton, including Alice, Jim and Rob Walton, own more than half of Wal-Mart's stock, valued at more than $115 billion, about $10 billion less than last year.
Jim Walton, a son of Sam Walton, has pledged more than 4.2 million shares valued at more than $291 million as security for a line of credit to a company not affiliated with Wal-Mart. The company is not identified in the proxy statement.
Last year, Arvest Bank, which is owned by Jim Walton, Rob Walton and the John Walton Estate Trust, and some Arvest subsidiaries paid Wal-Mart about $500,000 for the rent of space in Wal-Mart Supercenters and Neighborhood Markets. Jim Walton is chairman of Arvest.
Eric Scott, the son of former Wal-Mart chief executive H. Lee Scott, is the chairman and indirect owner of Cheyenne Industries of Little Rock. Wal-Mart paid Cheyenne and its subsidiaries $43.3 million for the purchase of home furnishings and related products.
Lori Haynes, the sister of Wal-Mart's current chief executive McMillon, is an officer of Mahco Inc. of Bentonville. Wal-Mart paid Mahco about $19.3 million for purchases of sporting goods and related products.
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