BROOMFIELD, CO—Vail Resorts Inc. CEO Robert A. Katz (top right photo) and his 2,500 employees have agreed to take a pay cut in a voluntary strategy to reduce the company’s expenses and save jobs.
The leading mountain resort operator in the U.S. reported the action to the Securities and Exchange Commission.
Katz, 42, will not take any salary for a 12-month period and then receive a 15-percent salary reduction. BusinessWeek, citing SEC data, put Katz’s salary as of Dec. 31, 2008, at $835,000.
His executive team, comprised of Jeffrey W. Jones, 47, (top left photo) chief financial officer and senior executive vice president, showed a year-end 2008 salary of $584,000;
Blaise Carrig, 58, (middle right photo) co-president, Mountain Division and CFO and executive vice president, Heavenly Mountain Resort, $434,000; John McD. Garnsey, 59, (middle left photo) co-president, Mountain Division, and chief operating officer and executive vice president of Beaver Creek, $425,000;
Keith A. Fernandez, 56, (bottom right photo) president, Vail Resorts Development Co., 412,000; and
Joe R. Micheletto, 72, chairman emeritus and consultant, $132,000.
Vail reported to the SEC that under the pay reduction plan, all affected employees will have their salaries reduced on a sliding scale from 2.5 percent for seasonal employees to 10 percent for executives. In addition, each full-time, year-round employee will receive a grant of stock-based incentive compensation with a value on a sliding scale from 1.5 percent of salary to 7.5 percent of salary for executives.
“This will increase the number of employees owning stock from approximately 260 to over 2,500, allowing many more employees to participate in ownership of the company,” says Katz.
Katz says he will not participate in the stock issuance. Each outside member of the company’s board of directors has also decided to reduce his annual cash retainer by 20 percent. Besides Katz, Jones and Micheletto, the board includes John Sorte, 61, of Morgan Joseph & Co. Inc.; William Stiritz, 73, Ralcorp Holdings Inc.; Thomas Hyde, 59, Wal-Mart Stores Inc.; Roland Hernandez, 50, Vail Resorts Inc.; Richard Kincaid, 46, EOP Operating LP; and John Redmond, 49, Menzies Aviation.
The SEC filing states wage reductions for seasonal employees will be effective after the current winter season. The wage reduction for all other employees will be effective on April 2, 2009.
Katz says, “This wage reduction plan, combined with certain other adjustments, is expected to result in expense savings of over $10 million on an annualized basis.
“I am very proud of the effort of our employees and our company’s performance in this unprecedented environment.
“However, it’s also clear that with the uncertainty that lies ahead, reducing cost is an imperative.
“We have chosen to address this situation by making the preservation of jobs and protecting the guest experience our highest priorities.
“By asking everyone to take less, starting at the top, we can continue to focus on our mission of extraordinary resorts, exceptional experiences.”
The company's subsidiaries operate the mountain resort properties at the Vail, Beaver Creek, Breckenridge and Keystone mountain resorts in Colorado; the Heavenly Ski Resort in the Lake Tahoe area of California and Nevada; and the Grand Teton Lodge Co. in Jackson Hole, Wyoming.
The company's subsidiary, RockResorts, a luxury resort hotel company, manages casually elegant properties across the United States and the Caribbean.
Vail Resorts Development Co. is the real estate planning, development and construction subsidiary of Vail Resorts, Inc.
(Vail Mountain Resort, bottom left photo)
Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE: MTN). The company’s last trade on Mar. 13 closed at $20.76 per share, down from $21.61 the previous day. The 52-week high and low share price for the past 12 months was $52 and $14.76.
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