Letters to the editor
December 1, 2003
The recent spate of public comments on Adam Aron’s compensation has prompted me to propose a few questions, facts, suggestions, and – perhaps – some information that will trigger some needed introspection among Adam’s would-be critics.
Firstly, let me explain that I barely know Adam Aron, having only met him casually at a couple public meetings. I have no significant business interests in Vail, nor do I own any VRI stock. I don’t even want to be a self-appointed defender of Adam; I’m only an independent, concerned and interested Vail citizen who wants to provide five items for Adam’s critics to consider:
1) Managing a major company in this economy is a very, very difficult task. Through timely diversifications and adept management, Adam and his management team, captained by Bill Jensen, have kept Vail Resorts fiscally sound and stable and, as a result of these actions, including the quality of the on-mountain skiing experience and the commendable work of VRI employees, Vail has remained the No. 1 North American ski resort.
I submit that many of the critics’ very jobs, their property value appreciations, and their personal enjoyment of Vail’s amenities are critically dependent upon the continued success and financial viability of the Vail Resorts company.
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2) Adam’s compensation is not out of line relative to that of CEOs of other comparable U.S. companies. His performance is judged to be above average by people more experienced in such assessments than his critics. Further, his compensation is comprised in large part of Vail Resorts equities’ appreciation and equity appreciation embodied in other assets such as real estate. The value of these entities is directly dependent upon the commercial success of Vail Resorts’ holdings. So, if Adam can cause these assets to appreciate, along with related assets owned by others (some of whom I presume are his critics), then I say he deserves to partake in large measure in the results.
3) As a local employer, Vail Resorts owes nothing to their employees other than respect, certain jobs at competitive market rates, and personal advancement potential tied first to the Company’s success and second to individual contributions and competencies. Perhaps, also, it is incumbent upon Vail Resorts to be a good corporate citizen as measured by doing their fair share in community support and environmental preservation endeavors. Here again, due largely to the company’s relative good health and fiscal viability, they have met these challenges and responsibilities quite well.
4) Can you imagine the crisis and calamity that would befall the Vail and Eagle valleys if Vail Resorts were to fail as a viable, stable, fiscally sound company? It would be devastating to the economy of the whole area! Yes, our very well-being is very dependent on the health of Vail Resorts Inc. as a company. That continued health very much depends on quality management. Quality management talent is not cheap.
5) Yes, Adam isn’t a Chad Fleischer or a John Claude Killy; I guess he’s hardly an intermediate skier. But I can readily tolerate a CEO who tours the mountain on a snowmobile, sips lattes with celebrities at base lodges, wears funny sweaters, is physically not totally fit, is highly compensated, and spends time in New York, if he also maintains, and continues to maintain, “your” and “my” mountain, our ski experience, and Vail Valley amenities as No. 1, and continues to maintain market-competitive job opportunities and well-being for you critics and others.
Accordingly, I’m appalled at the hypocrisy and seemingly myopic, selfish jealousy displayed by those “locals” who criticize Adam’s performance, his compensation, and/or his ties to the corporate and public finance world. Think about how your well-being is dependent upon, and how grateful you should be, for having a competent CEO who has succeeded in keeping Vail Resorts a fiscally sound, well-managed company as measured by the company’s standing relative to its peers.
Lastly, for the record, do I think today’s CEOs, overall, are excessively compensated? Yes! Historically a compensation ratio of 50:1 or so between the CEO and lower paid professional workers in the company was the norm. Today, executive compensation has gotten out of hand such that some ratios approach 300:1 to 400:1. That is excessive and should be corrected by appropriate shareholder-friendly legislation and controls.
But in the meantime, the free market will justifiably rule, and under those rules Adam’s compensation is not out of line.