Banner beet harvest brings big paychecks to American Crystal Sugar execs
MOORHEAD - An ongoing lockout may dampen the mood at American Crystal Sugar Co.'s annual meeting today, but the company's bottom line certainly won't: A banner beet harvest produced big profits for the sugar cooperative and big paydays for executives.
The company turned $1.5 billion in net revenues for its 2011 fiscal year, which ended Aug. 31. That's up from $1.2 billion in 2010.
The gains come from last year's bountiful harvest and production season, which predates the current four-month-old lockout.
High sugar prices, a strong crop and good storage weather all added up to record earnings, said Brian Ingulsrud, the company's vice president of administration.
For Ingulsrud and the company's other top executives, that success also triggered six-figure increases in compensation - on top of similarly handsome boosts in recent years.
Critics of the lockout say those increases show the company can afford to make its workers a better offer.
David Berg, the company's president and chief executive, saw his total compensation climb 23 percent from about $2 million to $2.4 million.
Berg's compensation has climbed nearly 50 percent from $1.6 million in 2009, his first full year as chief executive.
The company's other three highest-paid executives also saw big bumps this year:
* Chief Financial Officer Thomas Astrup's compensation climbed from $736,000 last year to $963,000 in 2011.
* Chief Operation Officer Joseph Talley's compensation rose from $908,000 in 2010 to a little over $1 million.
* Ingulsrud's compensation rose from about $700,000 last year to $809,000 in 2011.
Those increases were driven largely by short-term incentives pegged to performance goals and long-term incentives tied to shareholder value and farm profits.
Ingulsrud said the value of those incentives rises and falls with the fortunes of the company. Berg, for instance, saw the value of one form of his long-term compensation - stock equivalents known as contract rights - rise by about $250,000. That value can fall in down years.
"It mimics what our shareholders are experiencing financially," Ingulsrud said. "In a good year like this year, you're going to see some higher compensation levels."
The board of directors uses a compensation consultant to determine executive compensation, measuring American Crystal's executive pay against that of executives at comparable companies. Ingulsrud said the board aims to keep compensation near the bottom quarter of that group.
John Riskey, a local president for the union that represents the 1,300 locked-out workers, said it was apparent even before the lockout that American Crystal would enjoy a strong year. He said the company should share the prosperity with its workers.
"We were the ones who were responsible for helping them make those record profits," he said. "We worked our tails off to make sure that they got every beat sliced."
The company has offered 17 percent pay increases over the next five years. It says the average wage and benefits package for union employees is worth about $75,000 a year.
But a bigger sticking point has been proposed changes to health insurance coverage that would more than double employees' maximum out-of-pocket costs for family coverage - a change that remains unpalatable to many union workers.
Ingulsrud said the company is trying to strike a deal that will hold up in less profitable years as well as record ones.
Riskey said the union has offered shorter-term deals to prevent the company from committing to an untenable position.
"We don't want to see them go belly-up," he said.
Both Riskey and Ingulsrud said they wish a deal had been reached by now. Ingulsrud said the fact that they haven't "casts a shadow" on today's meeting.
DAVID BERG, president and chief executive:
Base salary: $587,169
Total compensation: $2,438,775
THOMAS ASTRUP, vice president of finance and chief financial officer:
Base salary: $295,321
Total compensation: $963,947
JOSEPH TALLEY, chief operating officer:
Base salary: $389,896
Total compensation: $1,046,389
BRIAN INGULSRUD, vice president of administration:
Base salary: $269,002
Total compensation: $809,276
Directors are paid $650 per month, plus a per diem of $300 for each day spent on company activities. The board chairman is paid $2,150 per month, and the vice chairman is paid $1,150 per month.
Neil Widner, chairman of the board:
Curtis Haugen, vice chairman of the board: