Filling 20th-Century Needs Fills Executive Wallets Too
Business executives who earned top dollar in the South Bay last year generally were purveyors of distinctively late-20th-Century products.
A Times survey shows that the executives with publicly owned firms who received the region’s highest pay usually earned the big bucks by inventing, manufacturing, distributing or disposing of such items as computers and food supplements, vitamins and space ships, semiconductors and hazardous waste.
But the two highest paid executives on the South Bay’s list come from more traditional lines.
Lloyd E. Cotsen, head of Westchester-based Neutrogena Corp, made nearly $6.1 million by selling soap and related products. And John W. Amerman, chief executive of Mattel Inc. in El Segundo, hauled in more than $2.8 million for leading the giant toy maker.
Pay figures reported by The Times come from the reports of the publicly owned companies, which must reveal the pay of top officers to shareholders. The listing does not include compensation for the heads of private firms or for professionals, entertainers, educators or government employees. Also not listed are executives of large companies with South Bay operations that make their corporate headquarters elsewhere, such as TRW Inc., Northrop Corp. and Hughes Aircraft Co.
The rankings are based on where executives work, not where they live.
Experts say the South Bay has drawn a number of major corporations because its land prices are cheaper than downtown Los Angeles or the Westside, it has ready access to Los Angeles International Airport and Port of Los Angeles and it offers a desirable environment that attracts executives who want to live and work there.
“The reason people want to be in South Bay is the total environment,” said Terry Reitz, a senior marketing consultant in the Torrance office of the commercial real estate firm of Grubb & Ellis. “The climate is good. The environmental quality is better than downtown or East L.A. And it’s close enough to major education institutions, UCLA being one.”
Aircraft and aerospace firms that came to the area after World War II benefited from the low land prices and have stayed on, even as rents and land values have escalated. The high-tech firms, meanwhile, have created a stable and highly educated labor force that, in turn, has attracted more companies from the technical field, Reitz said.
Neutrogena was one of the firms that enjoyed still-reasonable land prices when it moved to offices near Los Angeles International Airport in the 1960s. The location was also convenient for many employees, including chief executive Cotsen, who lives on the Westside, said company spokeswoman Linda Choen.
The company stayed and prospered. And so did Cotsen.
The Neutrogena CEO was typical of several of the region’s highest paid executives in that he received substantial compensation aside from his base salary. Cotsen earned $667,160 in cash payments and $5.4 million by exercising old stock options in 1990.
His compensation package made him the eighth-highest-paid business executive in California. He was one of 191 California executives who earned more than $1 million in total pay in 1990 while working for publicly owned firms, up from 163 who made that much the year before.
Also benefiting from a wide variety of pay and perquisites was the No. 2 executive on the South Bay list, Mattel’s John W. Amerman. The firm’s chief executive earned a meat-and-potatoes salary of just $618,846 in 1990. But Mattel added plenty of gravy.
First there was $602,000 in short-term incentive pay, based on the company’s yearly performance. Then there was more than $1.3 million for the company’s performance over three years. Throw in $237,500 in stock options, $68,065 in payments to a “Personal Investment Plan” and $7,925 in life insurance payments and Amerman totaled nearly $2.9 million in compensation.
The No. 3 ranking went to Gordon B. Hoffstein of El Segundo-based Merisel Computer Products, but Hoffstein might be tops if there were an award for creative pay arrangements. He made more than $2.3 million from Merisel last year, mostly for work he didn’t do.
The 39-year-old Hoffstein was founder and chief executive of the Massachusetts-based computer distributor Microamerica. When Merisel bought Microamerica last year, it hired Hoffstein for two months and paid him $75,000 to oversee the merger of the two firms.
But he made a lot more when he left Merisel at the end of May, including a $900,500 severance payment and a $1.3-million reward for signing an agreement pledging not to compete with Merisel for four years. That gave Hoffstein more than $2.3 million in compensation before he moved on to another chief executive position in Massachusetts.
The South Bay’s Top 30 is rounded out by a wide range of companies and products.
Four Mattel executives, besides Amerman, made the list, including Lindsey F. Williams, president of Mattel International, who ranked sixth with compensation of more than $1.5 million.
Merisel’s current chief executive, Michael D. Pickett, is also recognized for his pay of $825,396, ranking 18th.
Also represented are executives from vitamin and health product firms--Herbalife International of America and P. Leiner Nutritional Products Corp., both of Torrance; computer companies--Computer Sciences Corp. and Wyle Laboratories, both of El Segundo; a maker of spacecraft components and weapons systems--Rockwell International Corp. of El Segundo, and a hazardous waste disposer--International Technology Corp. of Torrance.
Guide to Title Abbreviations
CCOB: Co-chairman of board
CEO: Chief executive officer
CFO: Chief financial officer
COB: Chairman of the board
CONS: Consultant
COO: Chief operating officer
EVP: Executive vice president
LC: Legal counsel
P: President
SO: Subsidiary officer
SEC: Secretary
SVP: Senior vice president
South Bay’s Highest-Paid Executives
The following is a list of the highest-paid executives of publicly owned companies headquartered in the South Bay. It is taken from The Times’ annual executive compensation survey of California’s largest companies. The information was derived from proxy statements and annual reports of more than 500 publicly held California companies.
NAME COMPANY TITLE 1 Lloyd E. Cotsen Neutrogena P, CEO 2 John W. Amerman Mattel COB, CEO 3 Gordon B. Hoffstein Merisel Computer Prod. COO 4 Mark Hughes Herbalife International CEO, P 5 Donald R. Beall Rockwell International COB, CEO 6 Lindsey F. Williams Mattel SO 7 William R. Hoover Computer Sciences P 8 Jill E. Barad Mattel SO 9 James A. Eskridge Mattel EVP, CFO 10 Lawrence Thompson Herbalife International EVP 11 George L. Graziadio Jr. Imperial Bancorp VCOB,P,CEO 12 George M. Eltinge Imperial Bancorp COB 13 Norman P. Creighton Imperial Bancorp P, CEO, SO 14 John A. Sage Mattel SVP 15 Kent M. Black Rockwell International EVP, COO 16 Sam F. Iacobellis Rockwell International EVP, COO 17 Roy F. Farmer Farmer Bros P 18 Michael D. Pickett Merisel Computer Prod. P, CEO 19 William D. King Int’l Technology Corp. P, COO 20 George W. Jeffs Rockwell International SVP 21 Alvin E. Nashman Computer Sciences VP 22 Robert A. DePalma Rockwell International SVP, CFO 23 Irwin Helford Viking Office Products COB, P, CEO 24 Robert Sansone Mattel SO 25 Hayward D. Fisk Computer Sciences VP, LC, SEC 26 Kosti Shirvanian Western Waste Industries COB, P 27 Murray H. Hutchison Int’l Technology Corp. COB, CEO 28 Charles M. Clough Wyle Laboratories P, CEO 29 John R. Woodhull Logicon P, CEO 30 David Brubaker P Leiner Nutritional Prod. P
1990 Total NAME Comp. 1 Lloyd E. Cotsen $6,096,371 2 John W. Amerman 2,873,711 3 Gordon B. Hoffstein 2,331,500 4 Mark Hughes 2,013,821 5 Donald R. Beall 1,933,477 6 Lindsey F. Williams 1,509,163 7 William R. Hoover 1,449,363 8 Jill E. Barad 1,354,370 9 James A. Eskridge 1,154,239 10 Lawrence Thompson 1,124,060 11 George L. Graziadio Jr. 1,108,337 12 George M. Eltinge 1,098,581 13 Norman P. Creighton 1,088,652 14 John A. Sage 1,082,622 15 Kent M. Black 922,976 16 Sam F. Iacobellis 894,097 17 Roy F. Farmer 828,960 18 Michael D. Pickett 825,396 19 William D. King 823,152 20 George W. Jeffs 808,992 21 Alvin E. Nashman 769,654 22 Robert A. DePalma 716,983 23 Irwin Helford 683,110 24 Robert Sansone 630,693 25 Hayward D. Fisk 628,361 26 Kosti Shirvanian 613,989 27 Murray H. Hutchison 613,509 28 Charles M. Clough 589,440 29 John R. Woodhull 562,220 30 David Brubaker 556,891
Salary Stock Stock Other NAME & Bonus Options Awards Comp. 1 Lloyd E. Cotsen $667,160 $5,429,211 None None 2 John W. Amerman 2,560,221 237,500 None $75,990 3 Gordon B. Hoffstein 75,000 None None 2,256,500 4 Mark Hughes 2,013,821 None None None 5 Donald R. Beall 1,492,102 None $411,200 30,175 6 Lindsey F. Williams 1,506,237 None None 2,926 7 William R. Hoover 759,615 689,748 None None 8 Jill E. Barad 1,353,747 None None 623 9 James A. Eskridge 1,152,823 None None 1,416 10 Lawrence Thompson 1,124,060 None None None 11 George L. Graziadio Jr. 910,178 None None 198,159 12 George M. Eltinge 911,362 None None 187,219 13 Norman P. Creighton 780,339 None None 308,313 14 John A. Sage 1,079,527 None None 3,095 15 Kent M. Black 754,706 None 143,920 24,350 16 Sam F. Iacobellis 725,777 None 143,920 24,400 17 Roy F. Farmer 255,199 None None 573,761 18 Michael D. Pickett 271,821 None 527,575 26,000 19 William D. King 671,709 137,843 None 13,600 20 George W. Jeffs 585,017 None 205,600 18,375 21 Alvin E. Nashman 451,154 318,500 None None 22 Robert A. DePalma 594,083 None 102,800 20,100 23 Irwin Helford 671,154 None None 11,956 24 Robert Sansone 630,693 None None None 25 Hayward D. Fisk 240,000 14,917 None 373,444 26 Kosti Shirvanian 613,989 None None None 27 Murray H. Hutchison 599,809 None None 13,700 28 Charles M. Clough 570,000 None None 19,440 29 John R. Woodhull 450,324 None None 111,896 30 David Brubaker 549,720 None None 7,171
