Is Tilman over-compensated?

According to the Houston Business Journal, one group thinks he is:

Proxy Governance Inc. said in its report issued Thursday that the compensation package of CEO Tilman Fertitta is more than 10 times that of the company's other five named executives in its proxy statement filed with the Securities and Exchange Commission.

Houston-based Landry's (NYSE: LNY) has nominated board members Michael Chadwick, Michael Richmond and former Galveston County Sheriff Joe Max Taylor to be elected to the compensation committee at the company's annual meeting on Sept. 27.

Though the Virginia independent proxy firm believes the board is generally covering its oversight role, it urges voters to withhold votes for those positions because Fertitta's pay package is out of line.

"We have concerns regarding (Fertitta's) compensation," the report states, "given the company's financial performance relative to peers."

Among the 18 peer-group companies included in the group's analysis are California Pizza Kitchen Inc., Isle of Capri Casinos Inc., Ruth Chris Steak House and Trump Entertainment Resorts.

[snip]

According to the report, Fertitta's average annual compensation package for the past three years was $7.1 million, including base salary, bonuses and stock compensation. That is 350 percent higher than the CEOs of the peer group companies.

Not surprisingly, a Landry's executive disagrees:

Steve Scheinthal, Landry's executive vice president and general counsel, said Thursday that the company disputes the methodology used in Proxy Governance peer group calculations.

"When we use comparisons to an appropriate peer group, Fertitta's compensation is well within the group," said Scheinthal. "We disagree with the mechanics of how they've done it."

"If (Fertitta) doesn't get a competitive salary then he won't be here. And he is Landry's."

It's hard to disagree with that last statement.

Posted by Anne Linehan @ 09/21/07 08:04 AM | Print |

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