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Executive Is No. 1 in Salary That He Can No Longer Collect

May 26, 1991|JAMES RAINEY | TIMES STAFF WRITER

There should be a certain sense of achievement, a cachet, in ranking at the top of the list. But that distinction is a somewhat dubious one for Lewis B. Merrifield III, the former president of the Pic 'N' Save discount chain.

Sure, Merrifield ranked No. 1 in a Times survey of executive salaries in the Long Beach and Southeast areas of Los Angeles County for publicly owned businesses. But he enjoys the designation in absentia-- after being forced out last November as chief executive of the 186-store chain.

Merrifield was partly a victim of his own success. His annual pay of $975,000 in 1990 was among the issues raised by dissident shareholders who forced him out of his job. New chief executive Len Williams earns a base salary of just $450,000, Pic 'N' Save officials are quick to point out.

The former Pic 'N' Save leader and several of his colleagues from the Dominguez-based firm are among the prominent members of The Times' list of the top 25 in executive pay in the Long Beach and Southeast areas. Also represented on the list of top salaries are supermarket moguls, manufacturing executives and the operators of a giant health maintenance organization.

The salaries in The Times list come from the reports of publicly owned companies, which must reveal the pay of top officers to shareholders. The listing does not include compensation for the heads of private firms or for professionals, entertainers, educators, government employees and executives of large companies with local branches that make their corporate headquarters elsewhere. Additionally, the rankings are based on where executives work, not where they live.

Officials at several companies prominent on the list say they moved to the Long Beach and Southeast areas because of the region's strategic location between Los Angeles and Orange counties, while others cited office prices that are lower than those in downtown Los Angeles.

"We tried to minimize employee commuting and have a central location," said Jan Kauffman, spokeswoman for the manufacturing firm BWIP Holding Inc., which moved to Long Beach from Los Angeles seven years ago. "Downtown L.A. did not have as much office space available and Long Beach was starting to have more offices at reasonable rates."

Merrifield's pay ranked him in the top 10% for heads of companies the size of Pic 'N' Save, which had sales of $475 million in 1989.

His supporters on the chain store's board said he earned his keep by reorganizing and modernizing the company, while keeping it profitable in a volatile field. But critics pointed out that the company's earnings slid after he took over in 1986.

The company shake-up affected others on The Times' compensation list, as well. Four other Pic 'N' Save executives made the list for 1990 but only two--Steven Miral, 15th on the list at $295,000, and Sheldon S. McClusky, 23rd at $225,000--are still with the company.

Senior vice president David E. Blakely, who made $330,000 to rank 12th, and chief financial officer William M. Jacobs Jr., who made $280,000 to rank 17th, both resigned late last year.

Employment contracts for the company's top executives are now strictly tied to the firm's performance, to keep a tighter rein on pay, said company spokeswoman Eileen Hupp.

Merrifield and the other former Pic 'N' Save executives could not be reached for comment.

Another company well represented in the top 25, BWIP Holding, also had five of the top paid executives in 1990. And all of them are still with the firm, which builds pumps, valves and mechanical equipment for the power and petroleum industries.

BWIP chief executive Peter C. Valli ranked fourth on the list with pay of $639,992, while vice president Alvin L. Dubrow was 11th at a salary of $360,000.

Company officials moved 80 employees to Long Beach seven years ago from downtown Los Angeles, saying they found less expensive office space, more convenient commutes for workers spread around Los Angeles and Orange counties and proximity to the oil companies that BWIP serves.

"Long Beach has name recognition among the petroleum companies," said Kauffman. "The industry is very big here."

PacifiCare Health Systems, the 700,000-member health maintenance organization, also cited the region's proximity to both Los Angeles and Orange counties as reason for locating its corporate offices in Cypress.

The company, with nearly $1 billion in revenue last year, also had five of the Long Beach and Southeast area's top earners. Chief executive officer Terry Hartshorn topped that group, and was fifth overall on the list, with compensation of $627,060 last year.

Highest-Paid Executives in Southeast/Long Beach

The following is a list of the highest-paid executives of the publicly owned companies headquartered in the Southeast/Long Beach area. It is taken from The Times' annual executive compensation survey of California's largest companies. The information was derived from proxy statements and annual reports of more than 500 publicly held California companies.

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