Vail chief nets $8 million bonus
Aron bonus comes in the middle of two down years, but was offered in 2001, after best year in company history.
In a year when Vail Resorts reduced staffing, cut $20 million in expenses and employees saw a 2 percent raise, CEO Adam Aron last month received a bonus package valued at $8 million.
But the bonus isn’t for the last two years. It was a package offered by the company’s board of directors in July 2001, following five profitable years, and the most profitable year, 2001, as incentive for Aron to remain at the helm through Aug. 1, 2003.
Since then, the company’s fortunes and those of the national economy have slumped, and the grumbling about the timing of the bonus from within the company’s rank and file is hitting the streets.
That bonus package “vested,” or legally became his, July 31, and consists of: stock options; a $1.5 million cash bonus to purchase the 5,500-square-foot, five-bedroom, six-bath home on the Beaver Creek Golf Course; a $600,000 bonus to purchase a homesite on the Red Sky Ranch in Wolcott; a $645,750 bonus to purchase a lot at Bachelor Gulch in Beaver Creek; and club memberships at the Beaver Creek and Red Sky Ranch Golf courses. The latter carries a price tag of $165,000.
The bonus is in addition to Aron’s $715,000 salary.
Aron and Vail Resorts have a policy of not commenting on bonuses.
With appreciation in property prices, the value of the package was placed at $8 million by a company spokeswoman.
Those bonuses were offered in July 2001 following the company’s most profitable year when it registered $118 million in pre-tax profit.
Since then, a recession, deepened by the Sept. 11 terrorist attacks and a war with Iraq, have cut into the company’s earnings.
“We’re frustrated,” said Aron when the last quarter’s financial results were announced in July. “The financial results for the first half of our fiscal year were impressive and robust. With the actual outbreak of war during the busiest weeks of our ski season, both our mountain and lodging segments were adversely affected.”
About half of Vail Resorts’ 400 middle managers received performance-based bonuses during the last two years, a company spokeswoman said. The company’s workers received a raise in February 2002 but Aron did not.
He also did not receive an annual performance bonus for 2002 or 2003. His compensation package allows for up to 80 percent of Aron’s compensation to come from bonuses.
Aron, who has been at the helm of Vail Resorts since July 1996, also owns a significant amount of Vail Resorts’ stock: 121,000 shares of stock and 985,000 options with exercise prices ranging from $13.80 to $25 per share. If they were sold today, they’d be worth approximately $102,000. Vail Resorts’ stock at Thursday’s market close was $14.65.
When Aron took the helm of Vail Resorts, the company was valued at between $200 million and $300 million. Now it is worth an estimated $500 million.
Cliff Thompson can be reached at 970-949-0555 x450 or firstname.lastname@example.org