ANCHORAGE (AP) -- The five top managers of Cook Inlet Region Inc. have an extra reason to celebrate this New Year's Eve. In early January, they'll be able to cash in their long-term compensation packages: a pool of about $17 million.
CIRI's president and chief executive Carl Marrs, who engineered an extraordinarily successful investment in wireless telecommunications, stands to reap $3.8 million, based on Friday's stock prices. Vice presidents Barbara Donatelli, Mark Kroloff, Kirk McGee and Craig Floerchinger will collect $3.3 million each.
The board of directors of the Anchorage-based Native corporation voted 14-1 in favor of the compensation plan at a November meeting, according to Marrs. The board met again Dec. 15 and approved a $314 million cash payout to shareholders based on CIRI's windfall investment in VoiceStream Wireless Corp. and its bullish growth as a company over the past decade. Most of CIRI's 7,000 shareholders received $50,000 checks last week.
The senior executives' long-term compensation plan, approved in 1992, was supposed to be cashed out in 2002, Marrs said. Designed to motivate top managers and tie their performance to the success of the company, the package would have cost CIRI up to $100 million, he said.
CIRI has grown from a company whose shareholders' equity was $443 million five years ago to more than $1.2 billion at one point this year. The company's net worth is about $900 million now, he said.
To reduce its compensation liability, the board decided to negotiate a new deal, Marrs said. The company agreed to give the five executives 171,000 shares of VoiceStream, whose stock price closed at $100.63 Friday.
This month CIRI converted its joint-venture interests with VoiceStream into 8.1 million shares of the company's stock. Half of that is earmarked for shareholder distributions, some has been reinvested, and the rest goes to compensation, Marrs said.
Toronto Dominion, an investment firm that helped steer CIRI into the wireless industry, will receive 62,000 shares of VoiceStream as part of its contract with the Native corporation, Marrs said. That amounts to $6.2 million at current share price.
CIRI is the most financially successful of the 13 regional Native corporations Congress set up in 1971 to settle aboriginal claims to most of Alaska.
It also has been a lightning rod over the years for some shareholders who say the top executives make too much money at their expense.
Marrs' salary in 1998 was $264,679, with another $99,866 in bonuses and profit sharing, according to company documents. That excludes the long-term compensation he has been accruing but won't collect until next month, Marrs said.
Sen. Ted Stevens, an architect of the Alaska Native Claims Settlement Act in 1971, sees nothing wrong with the new compensation package and has nothing but praise for Marrs and his predecessor, former CIRI President Roy Huhndorf.
''I don't think anyone realizes how capable these people have proven themselves to be,'' said Stevens, R-Alaska. ''If this was a regular corporation, the bonuses would have been 10 times higher.''
Stevens said CIRI's business acumen funnels tens of millions of dollars into Anchorage's economy.
''People questioned Alaska Natives' ability to manage corporations. Well, this shoves that argument down the drain,'' said Stevens.
Some CIRI shareholders say Marrs and the others don't deserve a windfall.
''It doesn't sit well with me. I think they're being paid far too much,'' said Mary Ann Mills, 54, a CIRI shareholder and Sterling resident.
Many shareholders say that CIRI's top execs earn their keep and that rewarding them with $17 million is appropriate.
''I truly believe it is fair. CIRI is a very stable company. They have made very good business decisions from the beginning,'' said Charlene Gibbs, 30, a CIRI employee.
Board member Harold Rudolph, a frequent critic of CIRI management, said he wants to rescind his vote approving the compensation because he was not given the right information at the time. Rudolph questions the legality of giving stock to the managers, four of whom are not CIRI shareholders.
''These are corporate assets that belong to the shareholders. It violates ANCSA. We can't give our stock away,'' Rudolph said.
Marrs said third-party experts on executive compensation and corporate law structured the package and it's definitely legal. The people who are lambasting it ''are the same people have been stirring the pot for years,'' he said.
''I'd rather be criticized for compensation than criticized for poor performance. Our whole focus has been to make a life-changing distribution for our shareholders. We've achieved that,'' he said.
Peninsula Clarion © 2015. All Rights Reserved. | Contact Us