No bonuses for VR brass
“When you combine three pretty lousy quarters and one good quarter, we didn’t even come close to targets in the 2002 bonus plan,” said Vail Resorts’ chief executive officer, Adam Aron. “We missed “em by a mile.”
The news hints that the company’s fourth fiscal quarter, the results of which will be released early next month, won’t be rosy. The company’s fiscal year runs from Aug 1 to July 31.
“We had a terrible first half of 2002 because of Sept. 11,” Aron said. “We had a great February to April run, the best in the history of the company.”
Summer tourism and travel, he said, has not rebounded from the twin shocks of a lingering recession and of Sept.11. The company is rebudgeting, Aron said, and is cutting expenses 2 to 4 percent.
Aron said the new bonus plan will be set by the company’s board of directors in October.
“Corporate compensation has been headline news for months in the U.S.,” he said. “In this current climate, we don’t know what kind of bonus plan our current plan will approve.”
“We are leading by example, leading from the front and from the top,” Aron said. “There will be sacrifice at every level and fairly across the company.”
Aron said his salary this year will be 56 percent of what it was last year, which was $675,000. His bonuses last year included stock options valued at $2.6 million, a $1.5 million bonus for a Beaver Creek home and other perks.
“I realize there are plenty of people out there who would like 56 percent of my salary rather than 100 percent of theirs.”
In October, the company froze annual raises to its 12,000 workers – but then reinstated them in February when the business outlook brightened. The company was criticized for issuing executive bonuses that were issued based on the previous ski season’s performance. Those bonuses amounted to approximately 1 percent of the company’s gross expenses, Aron said.
“In this current climate where we’re facing war, terrorism and recession, we, as a company, will have to tighten our belts,” he said. “We need to save money anywhere we can.”
Vail Resorts is publicly traded (MTN-NYSE). Its stock closed Thursday at $15.20 a share, down 1.43 percent.
Cliff Thompson can be reached at 949-0555 ext 450 or firstname.lastname@example.org.