Management changes lead to increased spending on CEO pay

Colorado Springs-based companies spent nearly 11 percent more paying their chief executives last year despite a deepening recession, mostly because the two largest firms each paid two CEOs as a result of management changes.

Seven men who held the CEO post for four public companies based in the Springs took home $6.05 million last year in compensation - including salary, bonus, perquisites and stock awards and options, according to proxies filed with the Securities and Exchange Commission. Public companies must spell out executive pay, benefits and so-called golden parachute severance agreements in proxies, which also include annual stockholders meeting agendas.

Most of the annual meetings are held in Colorado Springs, but local stockholders of Century Casinos Inc. would have had to travel more than 10,000 miles to attend their company's meeting earlier this month in the tiny island nation of Mauritius - 560 miles east of Madagascar. Not many did other than co-CEO Peter Hoetzinger; most others participated in the 11-minute event by conference call, said Larry Hannappel, Century's senior vice president.

Westmoreland Coal Co. spent the most on its CEOs - nearly $2 million - because Delbert Lobb replaced Keith Alessi in April 2008, but only stuck around until January when he returned to an executive post with his previous employer. Lobb was paid nearly $1 million, while Alessi pulled down nearly $900,000 that included serving as non-executive chairman.  The combined CEO costs are 71.6 percent more than the $1.1 million Westmoreland paid Alessi in 2007.

Spectranetics Corp. also paid two CEOs last year - Emile Geisenheimer replaced John Schulte in October, a month after investigators from two federal agencies executed search warrants as part of a probe into the marketing of the company's lasers and parts used in them. The $536,658 Geisenheimer and Schulte together made last year was still down 11 percent from the $603,099 Schulte took home in 2007 and the least spent by any local public company.

Century has employed two CEOs for four years, and both got raises last year - Hoetzinger's compensation increased 12.8 percent to $1.15 million and Erwin Haitzmann's compensation rose 10.9 percent to $1.17 million.

Ramtron International Corp. CEO William Staunton took the biggest pay cut - 22.8 percent as a result of not earning stock awards due to failing to meet profit targets - but was still the highest paid at $1.31 million.

The increased spending on CEO pay comes as three of the four companies reported losses for 2008 and Ramtron's profits declined, mostly because of onetime writeoffs and charges or gains inflated by tax benefits in the previous year.

Detail

Century Casinos Inc.
Business: Operates casinos in Colorado, Canada, Poland, South Africa and aboard cruise ships
Annual meeting: April 7 in Port Louis, Mauritius, where a subsidiary that operates its South African and cruise ship casinos is based
Co-CEOs: Erwin Haitzmann and Peter Hoetzinger
2008 compensation: $1.17 million for Haitzmann, $1.15 million for Hoetzinger
2007 compensation: $1.04 million for Haitzmann, $1.02 million for Hoetzinger
Change: Up 10.9 percent for Haitzmann, up 12.8 percent for Hoetzinger
Rationale: Much of Haitzmann's and Hoetzinger's raises came from additional stock awards given as an incentive to participate in a new deferred compensation plan started to "maintain satisfactory cash balances." Neither requested nor will receive bonuses this year "in light of the current economic recession and company performance."
Golden parachute: $5.58 million for Haitzmann and $5.17 million for Hoetzinger, including three years of pay, three times the average bonus paid for the past three years, a consulting agreement at his current compensation level for three additional years and immediate vesting of all stock and options

Ramtron International Corp.
Business: Semiconductors
Annual meeting: May 29 at Hilton Garden Inn, 1810 Briargate Parkway
CEO: William Staunton
2008 compensation: $1.31 million
2007 compensation: $1.69 million
Change: Down 22.8 percent
Rationale: Most of the reduction came in fewer stock awards, resulting from failing to "achieve the minimum net income target" in the company's stock award program. All Ramtron top executives took 12 percent pay cuts this year as part of a companywide cost cutting program.
Golden parachute: $2.68 million, including two years' salary, two times total compensation for either 2008 or 2009, 18 months of continued benefits plus cash to cover their costs for another six months and immediate vesting of all stock awards and options

Spectranetics Corp.
Business: Manufactures medical lasers and related products
Annual meeting: June 10 at Colorado Springs Marriott Hotel, 5580 Tech Center Drive
CEO: Emile Geisenheimer
2008 compensation: $147,744 after becoming CEO in Oct. 22: former CEO John Schulte received $388,914 before his resignation
2007 compensation: Schulte received $603,099
Change: Total CEO compensation down 11 percent
Rationale: Schulte received no bonus or stock options before his resignation; Geisenheimer received options on Nov. 21 to buy 800,000 shares of stock during the next three years, but they are not included in his 2008 compensation because they cannot be exercised unless they are approved by stockholders at the June 10 meeting.
Golden parachute: $500,000, including one year's salary; Schulte did not receive any severance payments as a result of his resignation

Westmoreland Coal Co.
Business: Owns coal mines in Montana, North Dakota and Texas and power plant in North Carolina
Annual meeting: May 14 at company headquarters, 2 N. Cascade Ave.
CEO: Keith Alessi until April 2008, returning to post in January; Delbert Lobb from April 2008 to January
2008 compensation: $893,412 for Alessi, $987,007 for Lobb
2007 compensation: $1.1 million for Alessi
Change: Total CEO compensation up 71.6 percent
Rationale: Alessi's pay declined because he was serving as non-executive chairman for more than half of the year, but he got a 3.5 percent raise this month; Lobb's compensation includes $351,111 in stock awards that he forfeited when he resigned, though he did receive a $200,000 bonus the company agreed to pay when he was hired.
Golden parachute: None for Alessi or Lobb; the company paid $331,000 in severance benefits to former chief financial officer David Blair, who was replaced March 31.