Executive pay on Long Island: 4 men at Kimco Realty on top 10 list for 2023

Kimco Realty CEO Conor Flynn, with a pay package valued at $14 million, was the highest-paid executive of a Long Island publicly traded company last year, according to a Newsday analysis of data from Securities and Exchange Commission filings.

Flynn, however, wasn’t the only executive from the Jericho-based owner of shopping centers at the compensation pinnacle: Three other Kimco executives received pay packages that put them in the top 10.

Long Island’s 10 highest-paid executives received a median compensation package valued at $8 million, 140 times the $57,031 median salary of all Long Island workers. ("Median" is the amount where half earn more and half earn less and is generally more accurate than the average when there are outliers or extreme values in a data set.)

The full list of Long Island’s 183 highest-compensated executives is dominated by "C-suite" jobs such as chief executive, chief operating officer, chief financial officer and other senior management positions. Overall, these executives had a median compensation of $788,973.

Women were again underrepresented, accounting for only 26 of the 183 executives on the list, or 14%. The percentage is unchanged from 2022, when the list had 200 executives and 27 were women. At No. 38, Martina McIsaac, executive vice president and chief operating officer of Melville-based MSC Industrial Direct, was 2023’s highest-compensated female executive.

Pay disparity appears to be less of an issue once a woman is hired for these senior executive jobs. McIsaac’s $2 million pay package, for example, placed her third among the 18 COOs on the list. Overall, the median compensation for the 26 women on the list was $599,840, compared with $838,752 for the men.

"The big issue is getting in there, and I would say the old boys’ club is alive and well," said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, a Washington, D.C.-based advocacy research group critical of high CEO compensation and gender inequality in the workplace. "I think there still is this general view of women as caregivers and that their primary role is to shoulder caregiving responsibilities, and that can raise up really high hurdles to breaking into these top jobs."

In the top 10, Flynn’s three Kimco colleagues took slots seven through nine. They are Ross Cooper, president and chief investment officer, $5.9 million; David Jamieson, executive vice president and chief operating officer, $5.8 million; and Milton Cooper, co-founder and executive chairman, $5 million. Cooper, 95, cofounded Kimco in 1958.

Kimco owns more than 550 open-air shopping centers in the United States. About 35 of them are on Long Island, including Airport Plaza in Farmingdale, Bridgehampton Commons, Jericho Commons and Veterans Memorial Plaza in Commack.

The other executives in the top 10 were:

• Ivan Kaufman, chairman, president and CEO of multifamily housing lender Arbor Realty Trust Inc., $12.4 million.
• Timothy Gokey, CEO of investor documents provider Broadridge Financial Solutions Inc., $12.2 million.
• Stanley Bergman, executive chairman and CEO of dental and medical products distributor Henry Schein Inc., $10 million.
• Dan Bodner, CEO and chairman of business software maker Verint Systems Inc., $9 million.
• Steven Lisi, CEO and chairman of medical device-maker Beyond Air Inc., $6.9 million.
• Erik Gershwind, CEO and president of repair and maintenance supplies distributor MSC Industrial Direct Co. Inc., $4.9 million.

Collectively, the executives in the top 10 received a median pay increase of 8%. Raises for most Long Island workers, meanwhile, were eaten up by inflation. In Nassau, workers received an average raise of 1.1% in 2023 while Suffolk workers received an average 2.3% raise, according to data from the state Department of Labor. The inflation rate in 2023 was 4.1%.

Brian Dunn, an executive compensation expert who teaches corporate governance at Cornell University’s School of Industrial and Labor Relations, says several factors have resulted in compensation for top executives "that moves in a much more rapid pace" than for workers in general.

"There’s nobody sitting in the room when those decisions are being made that wants the number to be lower," he says. "Whether it’s the consultants, whether it’s the head of HR, whether it’s the executives, whether it’s the board members, they’d like it to be bigger rather than smaller."

Dunn, a Long Islander who has been called as an expert witness in high-profile compensation cases, testified in Delaware Court for the group opposing the record pay package awarded to Tesla CEO Elon Musk that was initially valued at $56 billion.

David Bujnicki, Kimco’s senior vice president of investor relations and strategy, declined to comment on Flynn’s and the other Kimco executives’ compensation packages but said "there are a lot of complexities" the compensation committee weighs when deriving executive pay. Among the considerations listed in the company’s proxy statement to "attract and retain a talented executive team" are rewarding executives for long-term growth in the value of Kimco stock, compensating executives with performance-based awards and linking executive pay to specific, measurable results.

The biggest component in the pay packages of Flynn and the other executives in the top 10 is "variable compensation" such as stock options, restricted stock awards and bonuses that can fluctuate based on whether the company meets financial and operational goals. Flynn’s salary of $1 million, which is considered "fixed compensation," is only 7% of his pay package.

"How the pay is delivered to CEOs tends to focus much more on variable compensation vs. fixed," says Kelly Malafis, a founding partner of Manhattan-based Compensation Advisory Partners, which consults with compensation committees and senior management on pay packages. She says that part of the philosophy behind variable compensation "is providing incentives to create long-term value for the organization and for the shareholders."

But variable compensation can work both ways. Verint’s Bodner, for example, who was 2022’s highest-paid Long Island executive with a package of $12.2 million, saw his compensation fall by $3.2 million because of a decrease in the value of his restricted stock awards. Verint stock fell 26% in 2023.

Nationally, the median compensation package for CEOs of S&P 500 companies was $16.3 million in 2023, up 12.6%, according to an Equilar / Associated Press study. The CEOs of the three Long Island-based S&P 500 companies — Henry Schein’s Bergman, Kimco’s Flynn and Broadridge’s Gokey — each had compensation packages less than the S&P median.

The highest-paid executive of an S&P 500 company was Broadcom CEO Hock Tan with a compensation package worth $162 million. Broadcom is no stranger to the Long Island business community. In 2018, the Palo Alto, Calif.-based software maker bought CA Technologies, which in 2014 when it was based in Islandia was Long Island’s biggest company by stock market value.

The SEC requires that larger companies calculate the ratio between their CEO’s pay and the pay of the company’s median employee. In 2023, the typical CEO earned 81 times the pay of their median employee, according to a database of 2,600 companies compiled by the University of Alabama. Put another way, it would take 81 years for that median worker to earn what their CEO makes in a single year.

Nineteen Long Island companies were required to disclose CEO pay ratios for 2023. Collectively, the CEOs of those companies received 64 times the compensation of their median worker. The major outlier was Napco Security Technologies, an Amityville maker of security systems. CEO Richard Soloway’s $1.3 million pay was 309 times the $4,328 compensation of his median worker.

In an SEC filing, Napco said 76% of its employees work in the company’s Dominican Republic factory, where they "have substantially lower compensation than those employees located in the United States." Napco did not return messages seeking comment.

And what about the elephantine pay package in the room — Musk’s $56 billion? Although the package was voided in January by Delaware Court Judge Kathaleen McCormick, who called it "an unfathomable sum," it was reapproved by Tesla shareholders in June, and Tesla has asked McCormick to reinstate it. Musk’s potential payout has been pointed to as the prime example of how CEO compensation has astronomically outstripped the earnings of rank-and-file employees and could spur other companies to approve exorbitantly higher compensation for their CEOs.

"It's absolutely obscene and there is that danger of normalizing even more obscene levels of pay," Anderson said.

If Musk collects the full $56 billion, how far will it put him above the median Tesla employee? In an SEC filing, Tesla said its median worker was paid $45,811 in 2023, so that employee would have to work 1.2 million years to earn the amount of money in Musk’s package.