Compensation Decisions and Results
For the year ended December 31, 2018, the Committee conducted its annual compensation review, which included a review
of compensation information disclosed in proxy materials by other companies and the general knowledge of the market by each member of the Committee.
Compensation reviews for all executive officers, including Mr. Sottile, are conducted annually and compensation adjustments are made based upon the performance of the Company and of each executive
officer, the executive officers potential, the scope of the executive officers responsibilities and experience, and base salaries for comparable positions at similar companies. In assessing the factors described above when making salary
adjustments, the Committee considers both financial and
non-financial
measures.
The Committee developed the individual and corporate goals and objectives relevant to the compensation of each of the Companys executive officers in 2018, including Mr. Sottile, evaluated the
executive officers performance in light of those goals and objectives, and recommended to the Board of Directors the appropriate 2018 compensation on the basis of those evaluations. The total compensation of Mr. Sottile and the
Companys other Named Executive Officers is detailed in the Summary Compensation Table below. This process is designed to ensure consistency throughout the executive compensation program.
The specific criteria used by the Committee for 2018 with respect to the potential bonus awards for executive officers was
shareholder value, as measured by the Companys earnings performance. Messrs. Sottile, Wherry and Spivey earned bonus awards in the amounts of $700,000, $427,345 and $246,035, respectively, for their performance in 2018. Bonuses for Messrs.
Sottile, Wherry and Spivey were paid in 2019.
The criteria and methodology for determining Messrs.
Sottiles, Wherrys and Spiveys 2018 bonuses were approved at the meeting of the Committee held on March 7, 2018 and ratified by the Board of Directors on March 7, 2018. The bonus awards for Messrs. Sottile, Wherry, and
Spivey were earned based upon the Committees assessment of the performance goals established in and for 2018.
Shareholder Advisory
Vote on Executive Compensation
At the Companys 2016 Annual Meeting of Stockholders, the Company
presented the required advisory
(non-binding)
stockholder vote on the compensation of the Companys named executive officers (commonly known as a
say-on-pay
proposal). As reported in the Companys Form
8-K,
filed with the SEC on June 2, 2016, the stockholders approved, on a
non-binding
advisory basis, the compensation of the Companys named executive officers. The Committee considered the results of this advisory vote by stockholders in its decision to make no direct changes to
the Companys executive compensation program for 2018 as a result of the vote.
Risk Management and Compensation
The Committee reviewed and evaluated the risks arising from the Companys executive compensation program (including
the mix of variable and
non-variable
compensation and potential bonus awards and performance goals under the 2016 Bonus Plan). The Committee determined, and management agreed, that the risks arising from the
Companys executive compensation program are unlikely to have a material adverse effect on the Company because (i) the Companys executive compensation program is designed to be balanced and not motivate imprudent or excessive
risk-taking by executive officers or other employees, (ii) the Company does not use incentives that encourage high-risk strategies, (iii) the Committee has significant discretion to reduce or eliminate bonus awards and (iv) the
Committee considers distinct quantitative factors with regard to performance-based compensation.
Executive Compensation Program for 2019
On March 7, 2019, the Committee approved, and on March 7, 2019 the Board of Directors ratified,
the Companys executive compensation program for 2019. The Companys executive compensation program for 2019 is generally the same as that for 2018, except that the Committees approval of compensation eligible to be earned for 2018
by Messrs. Sottile and Wherry was based on anonymous compensation survey data of similar companies provided by, and the recommendation of, Pearl Meyer & Partners, LLC (the Committees compensation consultant).
Base Salaries for 2019.
On March 7, 2019, the Committee recommended, and on March 7, 2019 the
Board approved, the following increases in the base salary for Messrs. Wherry and Spivey, effective January 1, 2019. Mr. Wherrys base salary increased from $300,000 to $305,730 based on the Consumer Price Index increase since
January 1, 2018. Mr. Spiveys base salary increased from $276,760 to $282,047 based on the Consumer Price Index increase since January 1, 2018. According to the terms of Mr. Sottiles employment contract, which contains
a Consumer Price Index escalator, Mr. Sottiles salary increased from $700,000 to $713,371. Mr. Sottiles 2020 base salary will increase above his 2019 base salary in proportion to any Consumer Price Index increase effective
January 1, 2020.
Performance-Based Bonus Plan for 2019.
On March 7, 2019, the
Committee approved, and on March 7, 2019 the Board of Directors ratified, the actions in regards to bonus opportunities for Messrs. Sottile, Wherry and Spivey for 2019 in accordance with the provisions of the 2016 Bonus Plan. Mr. Sottile
and Mr. Wherry will each have the opportunity to earn a bonus award up to a maximum of 200% of his base salary, and his bonus can only be fully achieved based on a target income of $11,164,798 for Goldfield in 2019. Mr. Spivey will have
the opportunity to earn a bonus award, which will be calculated as 2% of the
pre-tax
earnings of Power
12