Whistler Blackcomb (WB) recently released details of its executive compensation levels dating back three years, which showed a significant jump between 2011 and '12, corresponding with a period of strong earnings for the company.
The public document showed the total compensation amounts for the ski resort's top five executive officers, made up of base salary, and performance-based incentives.
President and former COO Dave Brownlie, who was appointed CEO in late 2012 after Whistler Blackcomb Holdings sold a 24 per cent stake in the company to private equity firm KSL Capital Partners, has seen his total compensation amount increase by 72 per cent between 2011 and 2013 with his new role and the corporation's positive earnings. WB did not pay out any short-term incentive amounts to executive officers in 2011 as the company fell short of the performance targets set by the board.
In the 2013 fiscal year, that amount totalled nearly $1.13 million, made up of a base salary of nearly $441,000, share-based awards of almost $375,000 (share-based awards are not always received in the year they are given and come with restrictions), and an annual incentive plan of just under $309,000. This represented a 17-per-cent increase in compensation from 2012 as a result of Brownlie assuming his new position.
According to Kai Li, professor of finance at UBC's Sauder School of Business, Brownlie's compensation level is "slightly on the high side, but not excessive," and is comparable to other public companies similar in size to Whistler Blackcomb.
"Typically the board compensation committee will give some percentage of increase (to the CEO) to signal to the market that this is the best guy for the job," she said. "If you pay the market rate, you're basically sending the signal that your CEO is just of average quality."
Independent compensation consultant Mercer LLC was hired by WB to provide benchmark data and compare the ski resort's compensation strategy to 93 companies with similar revenue levels. The review was completed in the 2012 fiscal year and its results are confidential. Brownlie confirmed the ski resort used the report "to ensure executive compensation is competitive with WB peers."
Jeremy Black, who was hired as senior vice president and chief financial officer in January 2013, received a total compensation of almost $560,500 for the year (salary $220,928). Senior VP of marketing and sales Stuart Rempel (salary $223,588), received nearly $417,000 in 2013. Over the same period, VP of mountain operations Robert Dufour received just under $294,000 (salary $179,803) in compensation, while VP of business development Robert McSkimming was given just over $282,000 (salary $166,199). The totals include significant share-based compensation and annual incentives.
Whistler Blackcomb uses a three-pronged approach to executive compensation, factoring in base salary, equity-based compensations relative to long-term goals set by the board, and an annual bonus, which is a cash incentive payment determined as a percentage of executives' salary based on a range of short-term financial performance thresholds.
"The compensation practices of the company for executives are designed to both motivate and retain those executives," Brownlie wrote in an email, adding that the approach is "consistent with most comparable public companies."
In the 2013 fiscal year, the financial performance thresholds were based on WB's achievement of a minimum target resort segment net EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). Whistler Blackcomb confirmed that EBITDA has increased from $74 million in 2011 to $86.4 million in 2013.
"EBITDA is the best indicator of our operating performance as it reflects the revenues and expenses under management's control and direction on an annual basis," wrote Brownlie.
Shares in Whistler Blackcomb Holdings, the company that owns Whistler Blackcomb, were listed on the Toronto Stock Exchange in November 2010. In late 2012, it was announced that KSL Capital Partners had agreed to buy Intrawest's 24-per-cent stake in Whistler Blackcomb Holdings.
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