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The Honolulu Advertiser
Posted on: Sunday, April 4, 2010

Isle CEOs take another hit in pay

BY Rick Daysog
Advertiser Staff Writer

For the second year in a row, CEOs of most of Hawai'i's largest companies saw their compensation decline, reflecting continued weakness in the local economy.

An Advertiser study of filings with the Securities and Exchange Commission found that the average pay for the head of a publicly traded company in the state dipped 0.4 percent to $1.13 million.

The figure is less than half of the record $2.3 million average pay for a Hawai'i CEO in 2007 and is well off the median pay for Mainland CEOs, which the Wall Street Journal recently estimated at nearly $7 million.

More than half of Hawai'i's top executives took a pay cut last year and none received a cash bonus.

Two CEOs have since stepped down from their companies while a third, Maui Land & Pineapple Co.'s Warren Haruki, took over as interim CEO halfway through amid financial problems at the company.

"I think everybody is operating carefully in this environment and are certainly aware of the public scrutiny as they should be," said Linda Lampkin, research director with the Economic Research Institute, which conducts executive pay and cost-of-living studies for employers.

"There's a lot of focus today on CEO salaries and I think boards are reluctant these days to rubber stamp things."

Alexander & Baldwin Inc. CEO Allen Doane regained the spot as the highest paid CEO in the state with a total package valued at $5.3 million.

Doane's 2009 compensation, up 7.7 percent from the year-earlier's $4.9 million, was largely in the form of stock and other incentive pay, which benefited from a 34 percent increase in A&B's share price.

Hawaiian Electric Industries Inc. CEO Constance Lau was the next highest on the list at $2.8 million, even though her overall pay was down 24.5 percent from the previous year.

According to HEI, Lau waived the cash bonus she was entitled to in 2009 and her base salary, like those of other HEI executives, was frozen at 2008 levels.

Mark Dunkerley, CEO of Hawaiian Airlines Inc., saw a slight dip in 2009 pay to $1.8 million despite a stellar year for the state's largest airline. Hawaiian's earnings soared 289 percent while its stock was up 9 percent.

Eric Mais, chairman of the Finance Department at University of Hawai'i-Mānoa's Shidler College of Business, said many executives in Hawai'i have seen the cash component of their bonus reduced drastically during the past year due to the sluggish economy.

Cash bonuses are typically tied to how much a company makes in a year and during a down period, that segment will usually decline, Mais said.

"Bonuses have been cut dramatically ... and at many companies there are decreases in the base compensation," said Kathy Inkinen, president of the local executive search firm of Inkinen & Associates.

Companies often do not comment on their CEO's pay and refer The Advertiser to filings with the SEC. Here's what those filings said:

• Bank of Hawaii Corp. Chief Executive Officer Allan Landon saw his 2009 pay decline by $70,513, or 4.9 percent, to about $1.4 million. Bank of Hawaii, recently named the nation's top performing bank by Forbes magazine, saw its shares increase by about 5 percent for the year;

• Central Pacific Financial Corp. CEO Ronald Migita's overall compensation doubled last year after the struggling bank holding company agreed to increase Migita's $1 a year base salary. Migita, who retired last month, earned $743,332 in 2009;

• Also stepping down last month was Hoku Corp. founder Dustin Shindo. Shindo earned $877,129 as CEO of the homegrown high-tech company, which has struggled to find financing for a $390 million plant in Idaho;

• Maui Land & Pineapple's Haruki, who earned $778,942 last year, was named interim CEO in May as the Kahului-based company reported huge losses and phased out its pineapple growing operations.

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