James Robo, head of the nation’s most valuable utility, was the highest-paid corporate boss in Palm Beach County and the Treasure Coast in 2016.
Robo collected $24.8 million in 2016, his second year as the region’s top-paid CEO. However, despite another strong year for NextEra, Robo’s pay fell from $30.3 million in 2015.
And while he was the top-paid utility CEO in the country in 2015, Robo lost that spot in 2016, according to Palm Beach Post research. His pay was eclipsed by three other utility executives, most notably the head of WEC Energy in Wisconsin, who was paid $37 million.
In contrast to Robo’s shrinking pay package, average compensation for all executives at publicly traded companies in Palm Beach and Martin counties rose 9 percent from 2015 to 2016. CEO pay at large companies nationally climbed 6 percent, providing fresh fodder to critics who fret about growing income inequality.
Robo’s pay included a $1.3 million salary and a $3.7 million incentive plan payment. But the big prize came in the form of stock wealth. Through stock vesting, Robo took ownership of 133,581 shares of NextEra (NYSE: NEE) worth $16.3 million. And he exercised options on 43,773 shares of NextEra for a gain of $2.5 million.
NextEra, the Juno Beach-based parent of Florida Power & Light, reported revenue of $16.2 billion in 2016, making it one of the nation’s biggest utilities and the largest company based in Palm Beach County.
NextEra shares in 2016 hit an all-time high of nearly $130, and the company’s market capitalization of $63.8 billion is tops among U.S. utilities.
“The stock has been a very high performer, and I think shareholders would have nothing to quibble about,” said Andrew Smith, a utility analyst at Edward Jones in St. Louis. “Investors in the stock have been handsomely rewarded.”
Robo and predecessor Lewis Hay often have led the Palm Beach Post’s annual rankings of CEO compensation, bringing gripes from critics who argue that it’s unseemly for the head of a company owning a state-regulated monopoly to collect such a hefty pay package.
Robo was paid handsomely in large part because NextEra stock soared 130 percent over the past five years and 206 percent over the past decade, which means his rewards have coincided with shareholders doing well. Even after exercising options, Robo still owns nearly 1.1 million shares of NextEra worth more than $150 million, an example of what compensation experts call aligning an executive’s interests with those of shareholders.
To calculate total pay, The Post counted salary, bonus, option gains, stock vesting and other types of compensation, including personal use of company planes and car allowances, at publicly traded companies. However, we excluded stock and options awarded during 2016 because their values can change widely between the time they’re granted and the time the stock is vested or the options are exercised.
NextEra Energy’s former chief financial officer, Moray Dewhurst, was the second highest-paid exec in the region. He collected $18.6 million, mostly in the form of stock options and grants.
No. 3 on the list was Roland Smith, the former CEO of Office Depot. He made $17 million in 2016, a year when he stepped down from the retailer. The biggest chunk of Smith’s pay came in the form of a $13 million stock vesting. He also received personal use of the company plane worth $275,682.
Smith stood to collect a much larger payday of $46.8 million if regulators had approved Office Depot’s merger with larger rival Staples, but the Federal Trade Commission blocked the marriage. During his three-year tenure at the Boca Raton-based company, Smith collected compensation totaling $29 million.
Martin Franklin, the highest-paid executive in Palm Beach County history, fell from the top of our list after he sold Boca Raton-based Jarden Corp. last year to Newell Rubbermaid of Atlanta. But Franklin hasn’t disappeared entirely. He made $2 million as chairman of Platform Specialty Products of West Palm Beach. Franklin also serves on the board of the renamed Newell Brands, but he wasn’t paid for his service in 2016, the company said.
We analyzed pay for 87 executives at 19 companies headquartered in Palm Beach and Martin counties. For those executives, average pay rose to $2.5 million in 2016, up from $2.3 million in 2015.
Nationally, CEO pay at large companies was up about 6 percent from 2015 to 2016, according to separate studies by compensation firm Equilar and the AFL-CIO labor union.
While pay climbed in part because U.S. stocks rose to record levels, Brandon Rees, deputy director of the AFL-CIO’s Office of Investment, decried what he called “runaway CEO pay.” According to the AFL-CIO, the typical CEO makes 347 times as much as the typical front-line worker.
“Boards should also consider how much the CEO is paid relative to other employees of the company,” Rees said.
Dan Marcec of Equilar agreed that CEO pay is “egregiously unequal” compared to wages of typical workers.
“You’ve seen rising pay packages over the past few years,” Marcec said. “You’ve also seen a rising stock market.”
The highest-paid executives in Palm Beach County
Realized pay in 2016:
1 James Robo, NextEra Energy: $24,781,873
2 Moray Dewhurst, NextEra Energy: $18,624,826
3 Roland Smith, Office Depot: $17,065,435
4 Jeffrey Stoops, SBA Communications: $16,554,925
5 Amin Khoury, BE Aerospace: $10,367,957
6 Steve Nielsen, Dycom: $7,533,658
7 Mark Cosby, Office Depot: $7,440,764
8 Werner Lieberherr, BE Aerospace: $6,956,886
9 Thomas Hunt, SBA Communications: $6,371,630
Source: The companies, Palm Beach Post research
HOW THE POST
GOT THIS STORY
To analyze executive pay trends, The Palm Beach Post’s Jeff Ostrowski looked at proxy statements filed by 19 companies headquartered in Palm Beach and Martin counties. He has been tracking executive compensation at area companies since 1999.
SEE THE SALARIES
The Palm Beach Post’s complete list of executive compensation for Palm Beach County’s top executives.
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