CEO Pay In Mississippi Fluctuates Broadly

As skittish shareholders punish company stock values for a bevy of scandals, a review of pay for chief executives at seven top Mississippi companies shows CEO pay fluctuates as wildly as the markets lately. Base salaries stayed about the same between 2000 and 2001, but when bonuses were counted, the numbers spun wildly.

Those with steady pay included BancorpSouth Corp.'s Aubrey Patterson, who made about $1 million both years; Hancock Holding Co.'s George Schloegel made $568,596 for two years straight.

At other companies, the numbers gyrated. Mississippi Chemical Corp. chief executive Charles Dunn was paid $516,000, including bonuses, in 2000 -- a year the company lost $23 million. The next year the company lost $37 million. Even so, Dunn earned more: $1.4 million, most of it coming from an $889,000 bonus.

He was the highest-paid CEO in Mississippi in 2001, according to numbers compiled by Chicago-based Aon Consulting. Scott Fergus, a compensation consultant for Aon, said proxy reports show Dunn was paid a lump-sum bonus because the company had to terminate a supplemental benefit plan to follow IRS rules.

Officials at Mississippi Chemical did not return calls seeking comment about Dunn's salary. Two Mississippi companies closely tied pay to revenue.

Bernard Goldstein, CEO at Isle of Capri Casinos Inc., saw his overall pay drop between 2000 and 2001. Goldstein earned $915,000 and $590,000, respectively.

"In that particular year my pay went down because we set up a forecast for ourselves and we didn't meet it,'' Goldstein said. "We do better when the company does better. We do worse when the company does worse. We're very conscious of the value to the shareholders.''

At ChemFirst Inc., which recently was sold to DuPont, revenue dropped from $24 million in 2000 to $11 million in 2001.

In response, ChemFirst's compensation committee gave chief executive Kelley Williams a smaller bonus: He earned $1.5 million in 2000 and $780,000 in 2001.

"They were incentive awards,'' said Jim McArthur, manager of investor relations at ChemFirst.

"ChemFirst earnings were down.'' Jeff Bacher, a compensation consultant for Aon Consulting who reviewed Mississippi CEO pay for this article, said executive pay in the state didn't look out of line with industry standards. Bacher noted that former WorldCom CEO Bernie Ebbers didn't get a bonus in 2001, "after driving the company down into the tank.''

Ebbers was paid a $10 million bonus in 2000, which boosted his overall pay to $11 million, the highest in the state that year. Ebbers also has reportedly borrowed more than $400 million from WorldCom, which has filed for bankruptcy.

Paul Grimes, head of the Department of Finance and Economics at Mississippi State University, said CEO pay should follow revenue.

"Economic theory says a worker's wage in a competitive market should reflect the worker's contribution to the firm's revenue,'' Grimes said. "If you have a superstar CEO who captures tremendous amount of market share, then perhaps they are worth a multimillion-dollar deal. If they're languishing in bankruptcy, then it's obscene.''

For boards to decide what their CEO should earn, a company might hire a compensation consultant to compare salaries at competing companies. Then, the company should look at the bottom line and pay accordingly, Bacher said.

"That's what should happen,'' he said. ``It doesn't always happen that way because of personal relationships and other factors that don't get reflected in the numbers of a company.''