Profits soared at Western Refining Inc. and Helen of Troy Limited last year, two of three publicly traded companies headquartered in El Paso, and so did the salaries of their top executives, who raked in the dough.

No chief executive officer was paid more, though, than Gerald J. Rubin, co-founder and CEO of Helen of Troy, which posted record sales last year and has seen its stock rise 19 percent so far this year.

The El Paso-based company, which makes personal care and household products, is better known for the brand names of its products, including Revlon, Vidal Sassoon, Dr. Scholl’s, Vicks, Braun and OXO.

In a recent proxy filing, Helen of Troy said Rubin’s take home pay was $14 million for the fiscal year ending Feb. 28, 2013. That’s $38,356 a day.

However, Rubin also received a $29-million stock bonus that he earns over three years if the company meets certain performance standards.

The way Helen of Troy pays its CEO, which resulted in the oversized bonus, has become rare among public companies since the economic collapse and subsequent overhaul of the financial system, executive compensation experts said.

“These are going the way of the dinosaur,” one expert said.

Soon it will be extinct at Helen of Troy, too. The company said it is in the process of reforming its executive pay practices, which would significantly lower Rubin’s total pay in the future.

But, for now, Rubin is the second-highest paid public company CEO in Texas. Only the CEO of Cheniere Energy Inc. in Houston was paid more – $53.3 million – according to an analysis of executive pay by Houston-based Longnecker & Associates.

The CEO of Irving-based Exxon Mobil Corp. ranked third.

El Paso-based Western Refining, which operates oil refineries in El Paso and Gallup, N.M., also had a record year, and the company’s CEO, Jeff A. Stevens, took home $2 million in 2012, according to the company’s most recent proxy filing.

In addition, the company awarded Stevens a $1.8-million stock bonus for meeting certain performance standards.

Western Refining executive chairman and founder Paul Foster is not paid a salary as a director of the company, the proxy statement says, but he owns $22-million worth of stock in the company.

At El Paso’s third publicly traded company, El Paso Electric, former CEO David W. Stevens resigned on Jan. 30, 2012, losing millions in stock awards. In the end, the company paid him $210,818 for 2012, according to a proxy filing.

The current CEO, Thomas V. Shockley III, took over on May 31, 2012. He was paid a total of $1.7 million in 2012, including performance-based stock awards.

Last year, El Paso Electric’s profits and sales declined substantially because of a reduction in electric rates. It had a profit of $90.8 million in 2012, compared to $103.5 million the year before.

Big bonus

Rubin’s total compensation was $41.6 million, which includes a $29-million stock bonus that he earns over three years if the company meets certain performance standards. His pay is high relative to the pay of chief executives of companies of similar size, the company’s compensation committee states in a proxy filing.

“There’s no question (Rubin) has clearly grown the company and created value, but what he is being paid now for the size of the company doesn’t make sense,” said Chris Crawford, president of executive compensation consulting firm Longnecker & Associates.

Tying bonuses to a company’s earnings can generally be a good thing, because it ties executive pay to performance, said Crawford and other executive compensation experts interviewed by El Paso Inc.

But as companies grow larger over time, it can also lead to oversized paydays for chief executives, they said. And when CEOs have employment contracts that renew indefinitely, it can be tough for boards to renegotiate contracts.

“You’ve got contractual law competing with what is right and reasonable from a corporate asset standpoint,” Crawford said. The firm is not consulting for Helen of Troy or any other public company in El Paso.

Rubin’s employment agreement dates back to 1999 when the company’s revenue was significantly lower, but the agreement did not have a fixed term.

In the proxy filing, the compensation committee said it gave Rubin the opportunity to earn the oversized bonus, “in order to obtain Mr. Rubin’s consent to eliminate the evergreen (provision), reduce certain severance costs and remedy certain other governance and pay practices.”

The compensation committee also said it would “significantly reduce” Rubin’s total compensation package when the employment agreement expires in February 2015.

Rubin’s base salary was $600,000 in 2012, but the overwhelming majority of his pay is tied to the company’s earnings before interest, taxes, depreciation and amortization, or EBITDA.

Responding to public pressure since the collapse of the financial market, more public companies now calculate their bonuses as a percentage of the CEO’s salary, one expert said. Jeff Stevens, Western Refining’s CEO, for example, is paid a bonus up to 200 percent of his base salary if he hits performance-related goals.

Riding the oil wave

America’s domestic oil boom has been a boon to Western Refining, helping to more than double the company’s stock price last year. Western stock opened the year at $13.58, rising 108 percent to close the year at $28.19.

Western found itself in the right place at the right time and profited last year from a glut of oil in the Permian Basin, which is basically the company’s backyard.

Western invested in new infrastructure to plug its El Paso refinery directly into one of the hottest shale oil plays in the country and slashed its debt by $304 million.

It all led to record earnings for the company last year. Western had a profit of $399 million in 2012, compared to $133 million the year before.

And Stevens’s base salary grew from $124,154 in 2010 to $873,277 in 2012. His total compensation was $2.5 million in 2012, according to the company’s proxy statement.

In addition, a war for talent in the energy sector has driven up the salaries of top executives in that industry nationwide because there aren’t enough experienced scientists and engineers to go around, experts said. It is particularly difficult for refining companies like Western Refining, which are operating on tight margins, to keep top talent, they said.

“The bigger, more complex, more risky the business, the more the CEO makes and the fewer people there are who can run a company of such size and complexity,” Crawford said. “There’s only so many ‘Michael Jordans’ of the world.”


Email El Paso Inc. reporter Robert Gray at or call (915) 534-4422 ext. 105.