Long Island's highest-paid executives

With a pay package valued at $12.2 million, Dan Bodner, CEO and chairman of business software maker Verint Systems Inc., was Long Island’s highest-paid public company executive last year. The region’s 10 highest-paid executives received a median annual compensation package of $8.8 million, 164 times the $53,787 salary the median Long Island worker earns. Median is the amount where half earn more and half earn less.

While those may be eye-popping numbers, the pace of raises for the highest-compensated executives of Long Island public companies has moderated, a Newsday analysis of data from Securities and Exchange Commission filings found. Four CEOs in the top 10 even saw their pay packages decline, a rare event in an era where CEO compensation has skyrocketed to record levels. The pay packages of top executives of public companies are typically top-heavy with stock-based compensation. In 2022, the S&P 500 stock index fell 19%. The Newsday Long Island Index, which tracks the largest local companies by stock market value, fell 18%.

Still, Bodner’s compensation package was 23% higher than it was in 2021. (Verint declined to comment about Bodner’s compensation.) In the top 10, Bodner is followed by Conor Flynn, CEO of shopping centers owner Kimco Realty Corp., whose $11.6 million package was 11% higher than in 2021. But Ivan Kaufman, chairman, president and CEO of multifamily housing lender Arbor Realty Trust Inc., saw his compensation drop 21%, or by $2.9 million. Even with the decrease, Kaufman’s $10.6 million compensation placed him third on the list.

Rounding out the top 10:

Timothy Gokey, CEO of investor documents provider Broadridge Financial Solutions Inc., $10.1 million.

Steven Lisi, CEO and chairman of medical device maker Beyond Air Inc., $9.4 million.

Stanley Bergman, executive chairman and CEO of health-care products distributor Henry Schein Inc., $8.3 million.

Keir Gumbs, chief legal officer for Broadridge, $6.5 million.

Erik Gershwind, president and CEO of industrial supplies distributor MSC Industrial Direct Co. Inc., $6.5 million.

Thomas Cangemi, CEO of New York Community Bancorp Inc., $6.3 million.

William Miller, CEO of semiconductor equipment maker Veeco Instruments Inc., $5.9 million.

Broadridge is the only company to place two executives in the top 10. Gumbs, the only non-CEO in the top 10, is also the highest-compensated Black executive in the top 200. In addition to Kaufman, pay packages declined for Gokey, Bergman and Cangemi.

For a direct year-over-year comparison, five CEOs in the top 10 — Bergman, Bodner, Flynn, Gokey and Kaufman — were also in the top 10 on the 2021 and 2020 lists. They received a median pay package of $10.6 million in 2022, up 0.8%. In 2021, they had a median pay increase of 15%.

The list of Long Island’s 200 highest-compensated executives is composed of CEOs, chief operating officers, chief financial officers, chief legal officers and other senior management positions. Overall, they had a median compensation of $816,223. The data is for the 2022 fiscal year but also includes companies whose fiscal year ended in January 2023.

National numbers higher

Nationally, the median compensation package for CEOs of S&P 500 companies was $14.8 million in 2022, up 0.9%, according to an Equilar/Associated Press study. That marks a steep deceleration from 2021 when pay packages for S&P 500 CEOs rose 17%. Sundar Pichai, CEO of Google parent Alphabet, with a pay package worth $226 million, was the highest-compensated CEO of an S&P 500 company.

“We’re still seeing a lot of what I see as excessive executive compensation,” said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, an advocacy research group critical of high CEO compensation and workplace pay disparity. When asked if the relatively modest CEO pay increases were a reaction to widespread criticism of exorbitant executive compensation, she said, “I would like to think that it was in response to all of the outrage, but I am very dubious about that.” She said it was more a case of declining stock prices affecting stock-based compensation.

Equilar director of research Courtney Yu, however, told Reuters that high CEO pay was a way of “incentivizing” the performance of executives while ensuring steadiness at the top of the organization. “You want stability of leadership to guide you through tough times," Yu said.

Women's pay continues to lag

On the list of Long Island executives, women are underrepresented — only 27 female executives are in the top 200 — and not represented at all until No. 58. Kristen Actis-Grande, executive vice president and chief financial officer of MSC Industrial Direct, was the highest compensated female executive with a pay package of $1.7 million. The 27 women had a median compensation package of $526,500 compared with $946,475 for the 173 men.

Of the 61 CEOs on the list, only three are women: Dorith Hakim (114th) of Edgewood aircraft parts maker CPI Aerostructures, Helena Santos (173rd) of Bohemia lab equipment supplier Scientific Industries and Elena Polyakova (196th) of Ronkonkoma air filtration products maker G6 Materials. Hakim’s pay package was $632,913, Santos’ was $259,500 and Polyakova’s was $124,663. The 58 male CEOs had a median compensation package of $1.2 million

“Women are very underrepresented at the top of the wage scale, and make up a disproportionately large share of low-wage workers, so they're heavily represented on the bottom end of the wage scale,” Anderson said.

Anoop Rai, a professor of finance at Hofstra University, said the modest compensation increases may be the new normal, at least for a while. “Overall, I think there is going to be a moderating effect,” he said. “How much we don’t know yet, because the gap between the CEO and average line worker is still very high.”

Missing from the top 10 are two executives from a small Melville biotech who were No.1 and No. 2 on the 2021 list. BioRestorative Therapies CEO Lance Alstodt and vice president of research and development Francisco Silva each received packages valued at $21.3 million in 2021. In 2022, Alstodt’s pay package fell to $452,364 while Silva’s was $427,364, putting them 132nd and 140th on the 2022 list, respectively. Alstodt’s and Silva’s 2021 compensation each included $14 million in stock options — although with BioRestorative’s stock price languishing, they were actually worth zero at the time. “None of my options are in the money,” Alstodt told Newsday last year.

A similar situation occurred in 2022 with Beyond Air’s Lisi, whose pay package soared 511% from 2021. Beyond Air, an 8-year-old company, stands in stark contrast to the far more established companies at the top of the executive compensation list, where five boast annual revenue of more than $1 billion, led by Henry Schein with $12.5 billion. Beyond Air, meanwhile, posted zero revenue in its past two fiscal years. The company’s key product, LungFit PH, which is used to treat patients with respiratory conditions, received FDA approval last year. In an August conference call with stock market analysts, Lisi said LungFit PH had been “well-received in the market” and Beyond Air now had “in excess of $1 million in contracted annual revenue.”

Lisi’s $9.4 million pay package includes stock options valued at $6.9 million when they were granted. But with Beyond Air stock sinking to a five-year low in August, Lisi’s options are worth far less than $6.9 million, and may even currently be worth zero. Neither Lisi nor the investor relations firm representing Beyond Air returned calls and messages seeking comment.

RSAs replace stock options

For many Long Island companies, stock options — with their “all-or-nothing” structure — have been supplanted by a more revved-up investment vehicle to recruit, retain and reward key executives: restricted stock awards, or RSAs.

RSAs are full shares of company stock granted to executives. Stock options, meanwhile, only give the recipient the option to buy stock at a preset “strike price.”

What makes RSAs “restricted”? Executives own the stock when it is granted but can’t sell it until after a vesting period, said Jonah Gruda, a tax partner in the Melville office of national accounting giant Marcum, who specializes in executive compensation. “It’s a way to incentivize performance while controlling the timing of that compensation,” he said.

Options become worthless if the stock price never goes above the strike price. But because RSAs are full shares of stock, they are worth something even if the stock price declines — and are enormously lucrative if the stock price soars.

“You have skin in the game right away and the value of that is really tied to the company’s performance,” Gruda said. “If I give you a [stock] option, it may not be worth anything.”

Five of the 10 highest compensated Long Island executives received the majority of their pay from RSAs in 2022. Verint’s Bodner received 88% of his $12.2 million pay package from RSAs. Six of the executives in the top 10, including Bodner, had zero stock options in their pay packages.