2005 Top Ten: Executive Payouts

If your boss handed you the financial equivalent of a lump of coal in this year's bonus stocking, you may want to stop reading right now. In 2005, SEC filings showed that a few executives of pure-play storage companies made out like -- well, bandits -- when it came to remuneration.

While the list below shows there's money to be made in the robust storage market, it also demonstrates that there's not always a link between a company's performance and what it pays the top brass.

NOTE: Most exec payouts reflect what was earned in 2004. The wages of the top 10 for 2005 may actually be higher.

No. 10: James Lambert, Dot Hill Systems

When we compiled this list last year, Lambert was one of the storage industrys biggest bonus winners, but not any more. Against a backdrop of restated financials and accounting hassles, the exec’s bonus was cut from a massive $1,270,074 in 2003 to a paltry $131,022 in 2004. (See Dot Hill Dots Its I's and Dot Hill Restates 2004.) But there was some consolation for Lambert in the salary stakes; his base salary rose from $350,000 to $395,058 over the same period. No. 9: Christopher Calisi, Overland

Overland CEO Calisi, whose firm recently spurned ADIC's advances, is another of 2005’s big earners, and a new addition to this list, despite some mixed financial results. (See Overland Reports Earnings and Overland Underperforms.) The exec earned a base salary of $462,692 in 2005, up from $419,904 in 2004. Calisi’s bonus is also heading in the right direction -- this was $141,075 in 2005, compared to $97,718 last year.

No. 8: John Kelley, McData

McData Corp.'s Big Mac received a salary of $404,237 in 2004, up slightly from the $390,854 he received in 2003. This time last year, there was some speculation that the CEO would be lucky to match his 2003 bonus of $125,000, but Kelley more than exceeded this, racking up $348,032 in bonus payments for 2004. (See 2004 Top Ten: CEO Payouts.) Although McData has been dogged by manufacturing and supply chain issues in recent months, the firm beat analyst revenue expectations in its recent third quarter results. (See McData's Mixed Bag and McData Reports Q3 Results.) It will be interesting, then, to see what impact these factors will have on Kelley’s 2005 bonus, which could, potentially, amount to 150 percent of his base salary.

No. 7: Greg Reyes, formerly of Brocade Brocade may have tired of its former CEO's financial demands, but that didn't stop him from getting a raise as he walked out the door in early 2005. (See Ex-CEOs Cash In.) Reyes was actually signed to earn $910,000 in base pay in 2005 -- 8 percent more than his salary and bonus in 2004. Still, the company fought back when it seemed Reyes was interested in doing little more than riding a gravy train. In July 2005, they shut off the flow of cash and issued a terse statement, including the following: "The Company expects to reverse approximately $1.6 million of the approximately $1.7 million compensation expense that was accrued as of the second quarter of fiscal 2005 (the three months ended April 30, 2005) in connection with the accounting for the agreement and employment arrangement with Mr. Reyes."

No. 6: Daniel Warmenhoven, Network Appliance

Last year we suggested that Network Appliance CEO Warmenhoven renegotiate his terms after a stellar 2004 for the storage networking firm. Back then, Warmenhoven’s salary was $441,681 and his bonus a comparatively measly $209,286. In 2005, however, as NetApp celebrated 10 years as a publicly traded company on the Nasdaq, Warmenhoven’s salary rose to a cool $500,000 and his bonus to $542,500. (See NetApp Rings Bell.)

No. 5: H.K. Desai, QLogic

QLogic, which sold its controller chip business to Marvell Technology Group Ltd. earlier this year, is clearly pleased with the performance of CEO H.K Desai. (See QLogic Gives Up Controllers and Marvell Buys QLogic Unit.) In 2005 Desai earned a salary of $682,564 and a bonus of $665,000. This is a stark contrast to 2004, when the former Western Digital exec’s $615,000 bonus actually outstripped his $576,606 salary. Desai also remained ahead of Paul Folino, his counterpart at Emulex Corp., in the pay stakes. In 2005, Folino earned a salary of $587,148 and a bonus of $494,488 No. 4: Richard Reese, Iron Mountain

Iron Mountain Inc. is apparently more than happy with the job Richard Reese is doing at the helm, at least if 2004’s SEC filings are anything to go by. Reese earned a salary of $849,526 for the year, compared to $770,769 in 2003. But it was Reese’s bonus which makes for the most interesting reading--a whopping $1,375,000 in 2004, up from $1,168,197 in 2003. With the company recently expanding its operations and upping its revenues, could Reese be in for another bumper payday in 2006? (See Iron Mountain Raises Guidance , Iron Mountain Expands and Iron Mountain Ups Q2 Revenues.)

No. 3: Joe Tucci, EMC

As reported earlier this year, Tucci earned a 2004 base salary of $1 million, plus a cash bonus of $1.88 million. Although Tucci’s base salary remained the same as in 2003, his bonus rose from $1.71 million in 2003, thanks largely to profitability bonuses. (See Tucci's Touch of Gold.) Tucci’s 2004 payout also included a discretionary bonus of $250,000. This, according to documents filed with the Securities and Exchange Commission, was on an account of the exec’s “outstanding leadership and individual performance during the year.” EMC, which experienced double-digit growth in 2004, has said that Tucci’s base salary will remain at $1 million for 2005 and 2006, but bonuses are a different matter. (See EMC Closes Year With a Bang.) Although Tucci’s target bonus is set at $1,440,000 for 2005 and 2006, the exec has had little trouble exceeding this amount in the past.

No. 2: Thomas Hudson, CNT Although not actually a CEO anymore, former CNT supremo Thomas Hudson was one of the big winners following his firm’s acquisition by McData. According to documents filed by McData, Hudson was in line for bumper termination payout on the closure of the $235 million deal. (See Networks Outperform at Nokia.) The acquisition was finally completed June 1, and Hudson, who received around $900,000 in salary and bonuses when we compiled this list last year, now serves on the McData board. Nice work if you can get it.

No. 1: Gary Bloom, Symantec

Another one-time CEO getting used to new surroundings is former Veritas supremo Gary Bloom, who featured on last year’s list, but is now firmly ensconced at Symantec following its acquisition of Veritas. Bloom, who was recently given responsibility for all six Symantec business units is now the firm’s vice-chairman and president. (See Kicked Upstairs.)

Bloom, who received a base salary of $1,000,000 and a $1,850,000 bonus from Veritas in 2003, is doing even better at Symantec. According to documents filed with the SEC earlier this year, Bloom has kept his $1,000,000 base salary, but is also eligible for a $5,000,000 sign-on incentive bonus.

— James Rogers, Senior Editor, and Mary Jander, Site Editor Byte and SwitchOrganizations mentioned in this article: