Report outlines VR executive compensation
As part of a separation agreement, Daly will be paid his full $434,436 annual salary through Oct. 31 of next year, according to a report given to stockholders for the annual meeting Monday in New York. And while he agreed to a year-long, Coloradowide non-compete clause, the company still will supply him with an office.On top of that, Daly and his wife, Lucinda, were extended favorable terms on loans for real estate and home improvements – a $300,000 loan, half at no cost and half at an interest rate of 9 percent, according to the report. Lucinda Daly also was provided the opportunity to purchase a Bachelor Gulch Village homesite for $438,750 – a price below market value – with no earnest money required. The entire purchase price was paid for under a promissory note secured by a deed of trust. She repaid the note Nov. 4.The report outlines the compensation, ownership of shares of stock by directors and officers, stock options and tax consequences, as well as insurance benefits given officers. There’s even a performance graph comparing Vail Resorts stock to the Russell 2000, S&P 500 and peer group indexes.Even without any annual performance bonuses for 2002, Vail Resorts brass has been well-accommodated. Top executives at Vail Resorts, for example, have all of or portions of their housing paid for by the company.Also outlined in the report are the salaries and benefits of the company’s remaining executives:- Adam Aron, the company’s chief executive officer and chairman of the board, received his annual $675,000 salary, but no bonus, for 2002. He owns 784,347 shares of common stock, as well as 2.27 million shares of restricted stock, and he has options to 120,000 additional shares. Aron, as do all the top executives, also has executive-sized insurance benefits paid by the company. The cost of his life, long-term care and excess disability insurance is $83,300. His $1.5 million house on the Beaver Creek golf course was purchased by the company for his use while employed by the company.- Chief Financial Officer Jim Donohue’s salary is $358,462. He has 20,000 shares with underlying options, and 12,000 restricted shares of common stock and options to purchase 60,000 shares of common stock. His insurance coverage costs $13,013.- Jim Thompson, president of Vail Resorts Development Company, was paid a salary of $363,462. Thompson’s insurance package costs $16,541.Thompson and his wife also received favorable terms on the purchase of homesites in Bachelor Gulch Village. No earnest money was due, and the purchase price that was beneath market values was to be paid under a promissory note of $350,000. That arrangement was amended in 1999 so that the note bearing interest of 8 percent is payable in full as a lump-sum payment due when the property is sold or within two years from the date Thompson ceases working for Vail Resorts. Thompson also received a one-time cash bonus that vests or becomes his on July 1 to purchase a selected lot in Red Sky Ranch and a membership in the golf club there.- Jim Mandel, senior vice president of Vail Resorts Development company, was paid a salary of $334,231; his insurance coverage costs $6,140 per year.- Vail Mountain Chief Operating Officer Bill Jensen’s salary was not listed, but the company requires him to live in Vail and provided him and his wife, Cheryl, $1 million toward the purchase price of a residence. Vail Resorts holds 49 percent ownership of the property, and a proportionate share of the resale price of the property when Jensen sells it.- Breckenridge’s chief operating officer, Roger McCarthy, received a $400,000 contribution from Vail Resorts toward a home purchase. The company will own 41 percent undivided interest in the residence and will receive a proportionate share of the resale of the property.- Martin White, senior vice president of marketing, received $600,000 for a home purchase, and the company retained a 37 percent interest in the property and a proportionate share of resale.- Edward Mace, Avon-based president of Rockresorts International, received a salary of $375,000. Rockresorts contributed $900,000 toward purchasing a house, keeping 47 percent of the ownership of that property. Mace also was granted an option to purchase 100,000 shares of common stock for $16.10 a share.- The annual salary for newly hired Blaise Carrig, chief operating officer of Heavenly Ski Resort, was not listed. But he was given $449,500 for housing by the company, which retained 50 percent ownership of the property.The report also outlined ownership of common stock by directors and owners:- Adam Aron, 784,347 shares.- Frank J. Biondi, 32,300 shares.- Craig Cogut, 9,720 shares.- Andy Daly, 245,090 shares.- Joe R. Micheletto, 1,000 shares.- John F. Sorte, 10,000 shares.- James Donohue 147,774 shares.- James Mandel, 63,001 shares.- Edward Mace, 33,334 shares.- James Thompson, 82,000 shares.A comparison was drawn between Vail Resorts’ stock and various investment funds. It showed that $100 invested in Vail Resorts at initial public offering was worth $71.64 at the close of the company’s fiscal year, July 31.The same amount invested in the Russell 2000 for the same period was worth $94.92, while $100 invested in the Standard & Poor 500 was worth $95.53.Vail Resorts’ stock, compared to a previous industry peer group and to a new peer group, was worth $88.70 and 87.11, respectively. The new industry peer group includes Hilton Hotels, Marriott, Marriott International, Six Flags, Intrawest and American Skiing Company.The document reports Vail Resorts pays $500,000 annually to Apollo Advisors as a management fee.Cliff Thompson can be reached at 949-0555 ext 450 or email@example.com.