Wal-Mart exec who made $244M in 2016 is highest-paid in Arkansas

2016 highest paid executives
2016 highest paid executives

Marc Lore, the founder and former chief executive officer of Jet.com, which Wal-Mart Stores Inc. acquired a year ago, is by far the highest-paid executive among Arkansas' largest public companies.

Lore, now Wal-Mart's e-commerce chief executive officer, earned almost $244 million last year, six times more than John Tyson, chairman of Tyson Foods. Tyson, the second-highest paid executive of an Arkansas public company, made almost $39 million last year.

The other highest-paid executives were Tyson Foods' Donnie King, who earned $23.7 million last year; Wal-Mart's Doug McMillon, who earned $23.4 million, and Tyson Food's Noel White, who earned $17.3 million last year.

Information on the highest-paid executives in the state, as well as other financial data, was gleaned from the annual proxy statements filed with the U.S. Securities and Exchange Commission.

The Arkansas Democrat-Gazette follows a formula developed by The Associated Press that reflects amounts identified in the proxy statements that are actually paid to executives.

Lore's total is about $50 million more than the previous highest income for an Arkansas public company executive. Alltel's former chief executive officer, Scott Ford, made $195 million in 2007. Ford was CEO when Verizon bought Alltel for $5.9 billion.

[DOCUMENT: Full breakdown of highest executive pay at Arkansas' largest public companies]

Wal-Mart announced in August last year that it had agreed to pay $3.3 billion for Jet.com, which ran an online marketplace.

Much of Lore's income was in stock awards connected to the Wal-Mart purchase of Jet.com. Lore received 3.5 million shares of restricted stock as part of the acquisition.

Often when a company is acquired, some of the first people to be let go after the deal closes are senior management officials of the acquired company, said Joshua Henke, director with Denver-based Compensation and Benefit Solutions.

That didn't happen when Wal-Mart bought Jet.com. For that reason, Wal-Mart had to disclose in its proxy statement much information that otherwise would not be required to be disclosed, Henke said.

"Wal-Mart didn't sweep anything under the rug," Henke said. "Wal-Mart did a great job of describing all the disclosures."

Wal-Mart disclosed that it is obligated to pay Lore $397 million over a five-year period from the date of the closing of the Jet.com purchase.

"In order to be entitled to these payments, Mr. Lore generally must continue to be employed by Wal-Mart through the various payment dates," the proxy said.

But if Wal-Mart terminates Lore without cause or Lore resigns for good reason, Lore continues to be entitled to the remaining payments in accordance with the payment schedule, Wal-Mart said in the proxy.

Lore formed Jet.com to take on Amazon.com, a company that Lore worked for for some time. Lore was the co-founder of Quidsi, which ran successful e-commerce sites Diapers.com, Soap.com and Wag.com

He sold Quidsi to Amazon for more than $500 million in 2010. After spending some time working inside Amazon, Lore founded Jet.com.

Lore's income of $244 million would pay the annual salaries of almost 10,700 Arkansans earning $22,798, the state's per-capita income according to the U.S. Census Bureau.

A spokesman for Wal-Mart did not return a call seeking comment on Lore's pay.

Lore's pay for last year may be the highest compensation package among public companies. Bloomberg News did a survey in May of the highest-paid executives and listed Lore as No. 1. Another ranking by The New York Times includes only chief executive officers.

"It's a large number," Henke said. "[Lore's] package going forward, which has $9.4 million of targeted compensation, certainly is not out of line. But because of the way public filings work and what is required from a disclosure standpoint, he's clearly going to be one of the highest paid in the U.S."

Lore also has the highest value of company stock -- $300 million -- of any executive at the 19 largest publicly traded firms in Arkansas.

The four publicly traded banks in the state had four of the five best stock returns in the past five years.

Home BancShares had the best return on a five-year investment of any of the 19 largest publicly traded companies in the state.

An investment of $100 in Home BancShares in 2011 returned $461 at the end of last year, about a 360 percent return. Bank of the Ozarks was third with a return of $378, Bear State Financial was fourth with a $263 return and Simmons First National Corp. was fifth with a $259 return.

Tyson Foods was second with a return of $452.

Banks nationally aren't doing as well, said Garland Binns, a Little Rock banking attorney.

"Arkansas' publicly traded banks are trading better than the norm for banks across the U.S., to tell you the truth," Binns said. "Arkansas banks [stocks] are doing outstanding."

The stock market is trading at an all-time high, Binns said.

"It's too early to tell [if the market can keep up its pace]," Binns said.

Wal-Mart's proxy also notes that the children of company founder Sam Walton -- Alice Walton, Jim Walton, Rob Walton and the estate of John Walton -- own about 51 percent of the company's stock. On Oct. 10, that stock was worth more than $130 billion.

SundayMonday Business on 10/15/2017

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