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No. 3: BLACK BOX
Terry Blakemore, CEO
Obermatt/CRN Pay-For-Performance Index: 297 percent excess pay
Black Box's fiscal 2010 earnings dropped 23 percent to $34.5 million. Nevertheless, Black Box CEO Terry Blakemore's total compensation doubled to $4.6 million in 2010 compared with $2.3 million in 2009 while leading the Pittsburgh-based communications systems integrator.
That hike in total compensation combined with the drop in earnings is one of the reasons that Blakemore was No. 3 on the list of overpaid CEOs, according to the Obermatt/CRN Pay-For-Performance Index, with 297 percent excess pay. Black Box executives did not return several email and voice-mail messages regarding their CEO compensation.
Blakemore's increase in total compensation came after Black Box's compensation committee, with the aid of an outside compensation consultant, "extensively re-evaluated the nature and structure" of the company's compensation program, according to the company's 2012 proxy. Blakemore's total compensation fell in 2011 even as the company posted record sales and a sharp rise in profits. For fiscal 2011, in fact, Black Box posted a 53 percent increase in earnings to $52.9 million. The company's sales were up 11 percent in fiscal 2011 to $1.07 billion.
Blakemore himself acknowledged the stronger results, pointing to the "power of our diversified solution offering and client base."
"In fiscal 2012, we look forward to strengthening our position as a communication system integrator by investing in our business and making select, strategic acquisitions," said Blakemore in a release discussing the 2011 results. "We remain committed to grow profitably and deliver value to our clients and shareholders."
Nevertheless, Black Box posted a loss in fiscal 2012 of $247.7 million on a 2 percent increase in sales to $1.09 billion. The loss came with "softening demand" in the commercial business and decreased spending from federal clients, according to Blakemore, who will retire from the company next spring and remain a member of the board of directors until the 2013 Annual Meeting.
On June 20, Black Box said that its board of directors had appointed Michael McAndrew, the company's current executive vice president, CFO, secretary and treasurer, to succeed Blakemore as president and CEO effective April 1, 2013.
Blakemore, who has been with the solution provider for 12 years, led the January acquisition of InnerWireless, a provider of in-building antenna systems, in an effort to expand Black Box's communication technology offerings. The buyout was announced the same day that Black Box reported a $283.4 million loss, or $16.12 a share, on revenue of $275.9 million in the third quarter.