When it came to their own paychecks, the executives of Spokane-area publicly traded companies collectively fared much better in the most recent fiscal year than did their employers.


An annual Journal of Business analysis of the compensation of about 75 executives of public companies in Spokane and North Idaho found that average executive salaries and bonuses grew by 8.4 percentto about $257,000in fiscal 1999, based on figures disclosed by the companies in their most recent annual proxy statements.


Though not quite as dramatic, overall average pay for the execs, including perks and long-term incentive payouts but not stock options, climbed 4.1 percent to about $321,000, the disclosure documents reveal.


Those gains are in stark contrast to the performance of the companies themselves. About half of the companies included in this years executive-pay analysis lost money in fiscal 1999. In fact, collectively, the net income reported by those companies between 1998 and 1999 fell about 45 percent. On average, their stock values also declined, by nearly 5 percent.


In a similar analysis last year, the Journal of Business found that executive salaries and bonuses here grew an average of 9.1 percent and that overall pay that year had shot up 13.3 percent. That analysis included some, but not all of the execs studied this year, since executives come and go.


The most notable difference between the two years was the absence in the most recent year of some big payouts to Avista Corp.s top executive, Tom Matthews, who, received more than $3 million in extra compensation in 1998 in connection with his hiring. In comparison, in 1999, Matthews received just $319,000 in other income, to go along with his $750,000 in salary. He received no bonus, but his overall compensation of just over $1 million still ranked him second on the Journals list of top 40 public-company executives (See accompanying chart.). Johnny Humphries, who retired in 1999 as chairman, president, and CEO of Itron Inc., took the top spot, at $1.26 million in total compensation, due mostly to the more than $830,000 he received in parting gifts.


By way of comparison, The Wall Street Journal reported this spring that the median salary and bonus among CEOs of the nations largest companies jumped 11 percent in fiscal 1998, and that corporate profits among those companies shot up 15 percent. The newspaper said the paychecks of non-union salaried workers in the U.S. rose 4.2 percent that year, and that overall, U.S. wages and benefits increased 3.2 percent. (Note that the Wall Street Journal uses medianor midpoint in a rangerather than average, in its comparative calculations for executives. The median salary-and-bonus increase in the Spokane study was 9.9 percent.)


Drawing conclusions from comparisons between the national and local studies might be difficult, however, since the Spokane area has relatively few public companies, which means the ebbs and flows of their individual corporate fortunesand thus the prosperity of their executivescan sway overall averages noticeably. A continuing trend in both analyses, though, are the increasingly noticeable presence of technology executives.


The Spokane study, which in the past has been dominated by natural-resource based companiesespecially mining companiesnow is dotted with technology-driven companies, including electronics manufacturers Itron Inc., Key Tronic Corp., and newcomer Lifestream Technologies Inc., as well as others that have tapped the Internet, such as Netivation.com Inc., and, increasingly, retailer Coldwater Creek Inc. Avista and hotel chain WestCoast Hospitality Corp. also have taken on decidedly high-tech strategies.


Youre going to see more technology companies on the list; new names on the list, says Spokane technology headhunter Jeannine Marx. She adds that eventually, It wont be the Potlatches and mining companies at the top of the list; it will be technology companies.


Marx, who operates JM Recruiting and helped to form the Technet support group here a decade ago, predicts that such Spokane companies as Telect Inc., LineSoft Corp., World Wide Packets Inc., and Webiness Inc. all will pursue public offerings in coming months or years.


The formation and growth of these companies here show that this is an area where that can happen, she says.


The top execs


This years list of the top 40 highest-paid, public-company executives signals a change for next years analysis. Six of the top 10 executives on this years list left their posts during or since their employers most recent fiscal year.


In addition to Humphreys, they include Michael OCallaghan, former vice president of corporate relationships at Itron; John Richards, retired chairman and CEO, and Thomas Smrekar, group vice president, both of Potlatch Corp.; Michael Chesser, who succeeded Humphries at Itron but left the company after only nine months; and Edward White, Itrons current chairman, who left his post as a company vice president during the year.


OCallaghan received $468,000 when he left Itron, and White received $600,000 when he resigned his executive post. Whites big separation check brought his total 1999 compensation to nearly $900,000, ranking him third on the list. Smrekar arrived momentarily in the top 10 courtesy of a $274,000 severance and $42,000 for unused vacation time upon his retirement.


Some of the other execs among the top 10 are regulars, including Matthews, who was No. 1 last year, Dennis Wheeler, of Coeur dAlene Mines Corp.; L. Pendleton Siegel, chairman and CEO of Potlatch; and Harold Gilkey, the top exec at Sterling Financial Corp.


Sterlings Gilkey made $620,000 in 1999, holding him steady at 8th. Included in his pay was a $198,000 matching contribution to the bank holding companys deferred compensation plan. Sterling Financial had the best growth in corporate profitsabout 106 percentamong the companies included in this analysis.


Without a bonus or big payout, Hecla Mining Co.s top executive, Arthur Brown, slid out of the top 10 with overall compensation of about $542,000, though his pay grew by an enviable 24 percent. Wheelers paycheck also jumped. Wheeler, chairman, president, and CEO of Coeur dAlene Mines, saw his overall compensation soar 32 percent, to $878,000. Both Hecla and Coeur dAlene Mines lost more than $40 million in fiscal 1999, and, like many precious-metals companies, their stock prices continue to be pummeled.


Richard Paulson, by virtue of his 1999 promotion to president and COO at Potlatch, rose to No. 12, from 22 on this years list, with total compensation of about $510,000. Also on the rise was Jack Oehlke, who, along with other Key Tronic executives, received a good bonus in 1999, a year in which Key Tronic posted $3 million in earnings, vs. a loss the previous year. He moved from a ranking of 34th to 15th, with overall pay of about $450,000.


The highest paid woman on this years list was Georgia Shonk-Simmons, chief merchant and president of the catalog and retail division at Sandpoint-based Coldwater Creek Inc. Ranked 13th, she had overall compensation of about $470,000, out-earning her bosses, Dennis and Ann Pence, who are chairman and vice chairman, respectively, of Coldwater Creek. They had matching pay of about $424,000 each. The only other woman in the top 40 was Sandra Powell, who retired early this year as Potlatchs chief financial officer, although Sterling Executive Vice President Heidi Stanley continues to climb up the list, this year ranking 54.


Noticeably absent from the top 40 were CEOs Donald K. Barbieri (53rd, at $180,000), of West-Coast Hospitality Corp., who ranked 36th last year and 11th the year before; Victor H. Bradley (57th), of Yamana Resources, and John A. Ueberroth (61st), of Ambassadors International Inc. A newcomer to the analysis, Christopher Maus, CEO of Post Falls-based Lifestream Technologies Inc., ranked 51st, at nearly $190,000. Also new to the analysis this year was Anthony Paquin, chairman and CEO of Post Falls-based Netivation.com Inc., who ranked 47th, at $201,000.


For this story, the Journal of Business tallied compensation in three general categories: salary, bonus, and other (See chart.). The latter category typically includes a variety of compensation, from perks and relocation expenses to consulting fees, signing bonuses and separation payments, and company contributions to various retirement plans.


It also includes payouts under long-term compensation plans, including restricted stock awards. Restricted stock is stock granted outright to the executive, without cost to the employee, but with limitations on when it can be redeemed.


The Journal didnt include awards of stock options, the value of which can vary depending on the price at which a companys shares are selling when the options are exercised. Through stock options, an executive receives the right to buy a certain number of a companys common shares at a specified, frozen price. The executive then has a certain period of time in which to exercise that right, and typically only a certain percentage of the awarded shares are exercisable, through a vesting schedule, each year during that period


For example, although Heclas Arthur Brown last year was awarded options to buy 160,000 shares of the companys common stock over the next decade, the exercise price was set at about $2.88 a share, making them worthless at least for now, since Hecla shares have been selling recently for around $1. In contrast, Coldwater Creeks Georgia Shonk-Simmons last year was awarded options to buy 20,000 common shares at $11.50 a share and 75,000 shares at $17.25 a share, and because Coldwaters shares currently are trading at about $30, she stands to profit if that price holds firm or appreciates further as her options become exercisable during the next five years.


Because the executive compensation levels studied for this story represent only the pay of executives of 16 publicly traded Inland Northwest companies for which disclosure information was available, they may or may not correspond with the compensation received by the execs of privately held concerns, which make up the bulk of Spokanes employers.


However, as private Spokane companies, especially those in the technology arena, do battle for talent in a tight national labor market, the pay levels of their employees increasingly should reflect those of their counterparts at publicly traded concerns, says Marx.


Many private technology companies here already are paying competitive executive salaries, she says.


The bar indeed is rising. When the Journal of Business looked at executive compensation in 1993, only five executives in the study made more than $300,000. In this years survey of 1999 pay, that number had climbed to 24. In fact, a dozen on this years list made more than $500,000.