Inside the Boardroom: Highest-paid CEOs

Paul Reilly, chairman and CEO of Raymond James Financial Inc., moved to the top of the list of highest-paid CEOs in the area, with a pay package valued at $13.1 million for fiscal year 2019.

Reilly edged past Mark Mondello, CEO of Jabil Inc., who was No. 2 on the list with total FY 2019 compensation valued at $11.4 million.

It might not be surprising that the CEOs of two of the largest and best-known companies headquartered in the Tampa-St. Petersburg area also are the most highly compensated, but the third name on the list is likely to be less familiar. He’s Gavin Southwell, CEO of Benefytt Technologies, a Tampa health insurance technology firm that recently changed its name from Health Insurance Innovations Inc. Southwell’s FY 2019 pay package was $10.4 million.

In a series of reports this week, the St. Pete Catalyst will take a deep dive into CEO pay as well as board compensation and diversity at the largest publicly traded companies headquartered in the Tampa-St Petersburg area.

Executive compensation is closely watched because it is supposed to be a benchmark for corporate performance, as companies say they tie pay to results.

This year, CEO pay arguably has gotten less focus than usual as the Covid-19 pandemic dominates the news. Many companies have shifted their annual shareholder meetings, historically held in late April and May, from in-person gatherings to virtual events online.

Dozens of CEOs and other executives nationally have voluntarily taken pay cuts as their companies lay off workers or see sales shrink. David Deno, CEO of Bloomin’ Brands, said he would forgo most of his base salary for the foreseeable future. Corporate officers at other major local companies including Superior Group of Companies and Welbilt, as well as smaller companies such as LazyDays Holdings and AutoWeb, also agreed to cut some of their cash compensation.

The measures are somewhat symbolic. Stock awards, not cash, make up the bulk of most executive pay packages. But cutting executive pay in troubled times could boost corporate reputations and help attract and retain workers, Corey Klemmer, director of engagement at investment adviser Domini Impact Investments LLC, told S&P Global Market Intelligence.

Eight-figure compensation club

Covid-19 was not a factor during 2019, when corporate executives and members of the boards of directors began compiling their proxy reports, detailing compensation, board practices and other key investor information.

At Raymond James (NYSE: RJF), a St. Petersburg-based financial services firm, Reilly’s total pay package included $500,000 in salary, a $5.875 million cash bonus and stock awards that were valued at $6.453 million as of the dates they were granted. In granting his bonus, directors cited his “strong leadership” that helped the company achieve record revenue and pre-tax income, as well as achievements in financial advisor recruiting and retention, compliance, leadership development and diversity and inclusion.

Reilly’s overall pay package increased 17.7 percent in FY 2019 compared to the prior year, while Raymond James reported a 6 percent increase in revenue to $7.74 billion, and a 21 percent increase in net income, to $1.03 billion. Raymond James’ fiscal year begins on Oct. 1 and ends on Sept. 30.

Total pay for Mondello, CEO at Jabil (NYSE: JBL), a St. Petersburg-based manufacturing solutions company, was flat in FY2019 compared to the previous year. His $11.4 million in total compensation included $1.215 million in salary, $8.14 million in stock awards and $2.05 million in cash incentives.

Mondello’s cash compensation increased slightly after a review showed his salary and annual cash incentive were below the market median, Jabil’s proxy said. Jabil, with a fiscal year from Sept. 1 to Aug. 31, reported a 14 percent increase in revenue in FY 2019, to $25.3 billion, and other double-digit percentage gains in core operating income, earnings and return on invested capital.

The third local CEO to move into the eight-figure compensation club last year was Gavin Southwell, who was named president of Health Insurance Innovations in July 2016 and promoted to CEO five months later. The company, which uses technology to distribute health insurance plans that are underwritten by third-party insurers, shifted its strategy in mid-2019 to emphasize Medicare plans as its core product line and to de-emphasize individual and family health insurance plans. It changed its corporate name to Benefytt Technologies (Nasdaq: BFYT) in early March.

Benefytt Technologies is significantly smaller than Jabil or Raymond James, with $381.8 million in total revenue in 2019.

In fiscal year 2019, which ended Dec. 31, Southwell got a small bump in salary, to $750,000 along with cash incentive of $1.2 million and stock awards valued at $8.38 million, based on the company’s pre-tax earnings, for total pay of $10.4 million, up 365 percent year-over-year.

That was the largest increase of any CEO who heads a locally based public company.

Here’s a look at 2019 pay packages for other area CEOs.

As of May 11, Tech Data (Nasdaq: TECD), a Clearwater-based IT distributor and the largest public company headquartered in the area, had not filed a proxy disclosing executive pay for its most recent fiscal year, which ended Jan. 31. Tech Data is going private in a $6 billion buyout by funds associated with Apollo Global Management, in a deal expected to close by the end of June. According to Tech Data’s most recent proxy, filed a year ago, CEO Rich Hume’s total compensation was $4.8 million.

There’s been heightened attention on how CEO pay compares to worker pay. More about that in tomorrow’s report.