CEO pay soars, HEI receives "F" for executive pay - Hawaii News Now - KGMB and KHNL

Special Report: CEO pay soars, HEI receives "F" for executive pay

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Henry Curtis Henry Curtis
Tami Keeman Tami Keeman
HONOLULU (HawaiiNewsNow) -

Hawaiian Electric Industries Inc., the parent of the Hawaiian Electric Company, or HECO, recently received an "F" grade for its CEO's salary, the highest in the state.

Glass, Lewis & Co., a proxy advisory firm that's closely followed by Wall Street and institutional investors, said the $5.8 million paid to CEO Constance Lau last year was more than what similar sized utilities paid their bosses.

"Overall, the company paid more than its peers, but performed worse than its peers," the report said. "The company has been deficient in linking executive pay to corporate performance."

Filings with the Securities and Exchange Commission show that Lau's 2012 compensation was nearly $2 million more than what Bank of Hawaii Corp. paid CEO Peter Ho, the state's next highest paid chief executive.

It was more double the amount paid to Hawaiian Air's CEO Mark Dunkerley, the third highest paid CEO in Hawaii.

HEI officials say the "F" grade is skewed by a one-time, $24 million charge that made the company's 2012 earnings look worse than they were.

They also cite a report by another influential proxy advisory firm -- Rockville, Md.-based ISS -- that concluded HEI's pay policies are "adequately performance based."

Local activists have long criticized HEI's executive pay policies, saying that salary increases come at the expense of consumers. They say the raises come at the expense of recent rate increases given to the company's utility subsidiaries. 

"More and more there's grumbling about high compensation and the high electricity rates," said Henry Curtis, executive director of Life of the Land.

"At a time when every one is hurting and the CEO is making piles and piles of money, it would be nice to say 'I'm going to hold my salary or I'm going to take a cut.'"

Lau isn't the only Hawaii CEO earning big bucks.

SEC filings show that eight of the top bosses at Hawaii's largest publicly traded companies earned more than $1 million dollars last year.

On the average, CEOs of these companies earned about $2.5 million in 2012, which was up more than 26 percent from the year-earlier period.

Here's what other companies paid their CEOs:

-- Matson Inc.'s top executive, Matthew Cox, received a 43.3 percent pay bump to nearly $2.1 million dollars. Cox's compensation benefited from the recent separation of the Matson shipping line from former parent Alexander & Baldwin Inc. The move added shareholder value to the two companies;

-- Territorial Bancorp Inc. CEO Allan Kitagawa, whose company continues to benefit from a growing economy and the bank's conservative lending policies. He earned nearly $2.1 million last year;

-- And, Hawaiian Telcom's Eric Yeaman, who saw a 39.1 pay increase to nearly $1.8 million, as the company hit its targets for revenues, cash flow and customer satisfaction.

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