For Ronald Foell, 1990 wasn't the best of all possible years. As president of a major home building company, Foell spent much of the year grappling with his industry's worst market slump in a decade.
Sales at Standard Pacific L.P. in Costa Mesa fell, profits dropped and Foell--who made almost $2.4 million in the boom of 1989--saw his compensation plummet, trimmed by 50% to make him one of the biggest losers in the state's paycheck sweepstakes.
There were dozens of other public-company executives like Foell, men and--in rare cases--women whose compensation is tied directly to corporate financial performance and who, in a year that ended in recession, saw their pay packages level off or even shrink after years of seemingly unbounded growth.
There also were exceptions.
The Times' annual survey of executive compensation at public companies found that 17 of Orange County's leading corporate executives pulled down $1 million or more last year, up from 15 in 1989 and just three in 1988.
And a total of 41 executives had annual compensation packages of $500,000 or more, up from 36 in 1989.
Emil Martini Jr., chairman of Bergen Brunswig Corp. and the county's highest-paid public company executive in 1990, saw his total compensation soar to nearly $2.2 million from $1.3 million in 1989, and William Shepard, president of Allergan, the Irvine pharmaceuticals maker, more than tripled his annual take to $1.2 million from the $369,552 he got in 1989.
In both of those cases, the companies' profits grew substantially in 1990--Allergan's up 42% and Bergen Brunswig's up 39%. Martini's compensation was swelled by nearly $1 million in special payments made to him when he retired as chief executive of the medial equipment and pharmaceuticals distribution firm he co-founded nearly 30 years ago.
But pay and performance didn't always march in lock-step last year: James Carroll, president and chief executive of Wynn's International, the Fullerton automotive additives maker, got a 28.6% raise, to $576,980 from $448,500, despite a 16% drop in corporate profits.
Things like that occur for a variety of reasons in the often puzzling world of corporate compensation, said Andy West, head of the executive compensation practice at the Wyatt Co., a major compensation consulting firm.
At large firms, he said, "managers usually are professional managers who are hired to do the job. They don't have a big stake in the company, so they typically are rewarded with big pay packages. They get cost-of-living raises every year, whether it was a good one or a lousy one, and their bonuses typically go up in step with their base pay, so their total compensation keeps rising." Compensation for professional managers also is often tied to what others in the same industry are making.
Pay, he said, is the way many executives keep score of their value to their companies and has become the glue, replacing loyalty, that keeps many companies and their leaders from separating.
But at the smaller firms that abound in Orange County, the top managers often are also the founders, and they typically retain a big share of their company's stock after it is taken public.
Because their real wealth is in the value of their stock, top officers are more likely to keep a lid on their pay, effectively reinvesting much of their potential annual earnings in the company to help it grow, West said. Compensation for those executives is more likely to keep pace with the economy.
Thus, while 1989 was the year Orange County executives saw compensation start to catch up with that of their counterparts in Los Angeles and San Francisco, the declining economy of 1990 widened the gap once again.
Despite the increase in million-dollar pay packages, the median compensation for top officers of local companies dropped 4.5% last year, to $186,500 from $195,219. And average compensation dropped nearly 9%, to $285,500 from $313,000.
Because only public companies report their top pay arrangements, such well-heeled local luminaries as Irvine Co. owner Donald L. Bren, South Coast Plaza developer Henry Segerstrom and home builder William Lyon don't show up in The Times' study. Their pay plans, like their companies, are private.
The Times' analysis looked at the pay packages of 377 executives at 86 publicly traded firms headquartered in Orange County. For each company, the study included up to five of the companies' most highly compensated executives--the only pay packages the companies are required to publicly disclose.
Once again, the list of highly compensated women executives was short: only eight of the 377 executives are female. And only two of the eight ranked among the county's top 100.
The best-paid woman at a publicly traded company in the county for 1990 was Kathy Bronstein, executive vice president of Wet Seal Inc., the Irvine-based women's discount clothing chain that just went public last year.