Pennichuck exec compensation revealed
Pennichuck Corporation compensated its top executives a total of more than $1 million in 2006, including a total of $350,000 to the three people who served as chief executive officer during the period, according to a filing last week with the Securities and Exchange Commission.
The filing also disclosed the dual role of the chair of Pennichuck’s compensation committee, who expects to get as much as $100,000 next year from the real estate arm of the Merrimack-based utility.
The filing came a week after Pennichuck – whose attempt to fend off the city of Nashua’s takeover by eminent domain of its waterworks has been put on hold during negotiations – announced a deal with the Public Utilities Commission staff to increase water usage rates by $5.2 million, or some 31.4 percent. That increase – which would replace a temporary increase of $2.4 million (14.4 percent) — has been in effect since July 2006. The permanent rate hike still has to be approved by the PUC Commissioners.
The company’s combined CEO pay for 2006 is slightly lower than the 2005 compensation package earned by Donald Correll, who stepped down in April 2006 received slightly less than $105,000 in salary and benefits last year. Interim CEO Hannah McCarthy, a board member, who received nearly $85,000 for her four months work, and the current CEO, Duane Montopoli, received $244,000 to finish out the last third of the year, including $141,000 worth of stock options to lure him to the company.
Other compensation packages included: nearly $214,000 for CFO William Paterson; almost $179,000 for executive vice president Stephen Densberger; more than $195,000 for Michael Fallon, president of Southwood, which handles Pennichuck’s real estate holdings; and more than $182,000 for Donald Ware, president of the utility part of the business.
Montopoli’s 40,000 options were the only stock options awarded last year, leaving 21,564 shares available for such awards, but that will change next year if proposed proxies are approved by the shareholders.
The company’s compensation committee is proposing to increase the number of potential option shares tenfold to 254,897, and award about 1 to 1.5 percent of common shares for options in the future, excluding awards to recruit new executives and other “special circumstances.”
“Such range reflects a balance between the dilutive effects of equity awards and the amounts to properly motivate key employees,” according to the filing.
The company also awarded board members with some $228,000 in cash in 2006, including McCarthy, who earned almost another $25,000 in addition to her stint as acting CEO.
Aside from McCarthy’s dual role, the company noted that another board member, James M Murphy – who chairs the board’s compensation committee — also had a “relationship” issue with the firm.
Murphy – who joined the board in January 2006 — is chairman and majority owner of Q10 New England Realty Resources, which HECOP III LLC retains for mortgage brokerage services. Pennichuck leases its offices from HECOP, which its Southwood subsidiary owns, in a 50-50 partnership, with developer John Stabile II.
Murphy said that his firm will get as much as $100,000 fees from HECOP in 2007, according to the filing. Last year, Pennichuck paid Murphy more than $37,000 for his services as a board member.
The company said that “these relationships would not adversely affect” Murphy’s status as an “independent director”
A previous CEO – Maurice Arel – resigned and paid a heavy fine because of various conflicts involving Southwood, including the retention of a landscaping business involving his son Arel’s relationships, however, were not disclosed until the company was investigated by both the SEC and the New Hampshire Bureau of Securities Regulation. – BOB SANDERS
