It pays to be the Chairman…

April 26, 2004

Shareholder advocates have long argued for splitting the job of Chairman and CEO, with some limited success, particularly in recent years. But if the Chairman is receiving a big fat consulting contract from the company, as is the case at upscale retirement home developer WCI Communities (WCI) , how much difference does it really make? In its recent proxy, WCI disclosed that Chairman Don Ackerman receives $660,000 a year — more than every other senior executive with the exception of the top two — under a consulting contract that expires next May. WCI disclosed this for the first time in last year’s proxy, even though Ackerman has been Chairman since 1995. Given that the consulting contract expires in 2005, it certainly appears as if this were a 10-year contract, though there’s nothing in the SEC filings that indicates how long the Ackerman arrangement has been in place. Unfortunately, this isn’t the only money that Ackerman, who is also WCI’s largest shareholder according to the proxy, and his various affiliates receive from WCI. The public company is paying $2.1 million for its Bonita Springs headquarters from a company owned by Ackerman and his family and leases two planes from companies owned by Ackerman and CEO Alfred Hoffman, paying around $35,000 a month plus flight time for the two planes.

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