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Heroes worship

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Heroes worship

You can’t always get what you want, but if you try, sometimes you just might find you get what you need!

By Edward Martin


Ah, exclamation points, pulse of the comic book!

“Superman, thank you! You saved my life! How can I ever thank you enough?”

”Well, Lois, there are a million comics for sale in endless rows of boxes at the 25th anniversary Heroes Convention! If you insist on thanking me, elbow your way through the crowd jamming the main exhibition hall at the Charlotte Convention Center — Phoomph! Take that, moose breath! — and find me Action Comics No. 1, June 1938, in which I made my debut. Find one in mint condition — not one of the known specimens is — and brokers here say it should be worth $1.1 million or more, up about 12% in the last year!”

“Holy cow!” organizer Shelton Drum exclaims.there must be 10,000 people here for the three-day show! Drum, 53, grew up in Newton, near Hickory, and as a kid bought comics at Downtown Pharmacy, dreaming of one day drawing them. He never made it. “Drat!” But in 1967, when he was in the seventh grade, he noticed that some issues of The Amazing Spider-Man, which had a cover price of 12 cents when they came out just a few years earlier, were fetching $7 each. “I started buying extra copies when each issue hit the newsstands.”

He opened his first comics store — Heroes Aren’t Hard to Find — in Charlotte in 1980 and soon had six in the Southeast. “Then a lot of speculators got into the market. That was in the early ’90s, and they were buying cases of books they could sell in a short time for an inflated price. That’s not how the market works. You can’t manipulate it. The market contracted quickly.”

One by one, he sold his stores — “they’re all still there, just under different owners” — keeping only the 10-employee Charlotte one. That, a few one-day shows and the convention, which this year featured more than 500 dealers and creators, including some of the biggest names in the business and legendary artists of the past. Here, among the geeks and gawkers, circulate some serious collectors,willing to fork over six figures if they find what they’re looking for. But the odds of finding a hidden gem like Action Comics No. 1 at a show like this are virtually nil. These dealers are pros who know exactly what they’re selling!

Most buyers are like Tony Brock, 39, from Tuscaloosa, Ala. — that’s a seven-hour drive! — who collects Bronze Age comics. Collectors often focus on a period: platinum, 1897-1937; golden, 1938-55; silver, 1956-69; bronze, 1970-79; and modern, 1980-present. Brock has been at this since he was a kid,with Silver Age stuff among his bronze. “The garage is full.” His collection is insured for $15,000. “I love the artwork, and they’re fun to read and fun to look at.”

Guys like Brock, Drum says, are the staple. “When a vendor sells a $5,000 or $10,000 comic, it makes me feel good. But the bread and butter is the $3, the $5, the $10 book.” So how much dough does this show rake in? That’s a figure he guards as jealously as a superhero does a secret identity.

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Green is good for venture capitalist

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People – September 2007

Green is good for venture capitalist
By Chris Roush

When SJF Ventures pumps money into some touchy-feely, Earth-friendly business that recycles computers or installs solar-powered water heaters, it’s partly because of David Kirkpatrick’s liberal-arts education at Duke University. His bachelor’s in physics and history got him “looking at how we can change the world for the better.”

That’s fine, as long as he doesn’t change his business for the worse in the process. And so far, Kirkpatrick, 47, has done OK as managing director of the Durham venture fund. Of the 25 companies SJF has funded during the past eight years, only one — a plastic-adhesive maker — has folded.

Among its current investments are Jackson Miss.-based Intechra, which recycles personal computers, and White River Junction, Vt.-based GroSolar, which installs solar-powered water heaters and air conditioners. SJF’s best return was more than 500%.

One advantage he has is a history of running similar companies. A military brat born in Columbia, S.C., he grew up in Charlotte, Houston, Germany and Greenville, S.C. After graduating from Duke in 1982, he started Durham-based SunShares, which installed solar water heaters. He got an MBA from UNC Chapel Hill in 1991 and left SunShares three years later to start KirkWorks, which matched environmental companies with investors.

In 1998, he began talking to Rick Defieux, a former environmental scientist working as a venture capitalist in Philadelphia. They raised $17 million — primarily from banks — in the Sustainable Jobs Fund a year later. It initially focused on startups, but Kirkpatrick now seeks more mature businesses.

He says a second fund of $28 million will perform better, but it will face more competition. More firms want to invest in so-called “clean tech” companies. Such investments increased 78% to $2.9 billion in 2006, says the trade group Cleantech Venture Network.

But there are also more green businesses wanting money. When Kirkpatrick started, he was reviewing 30 companies a month. Now SJF, with eight employees, reviews 200. It beat out a larger venture capital firm in Boston to invest in GroSolar. “We won that opportunity because we were a socially responsible fund.” Maybe that liberal-arts education is paying off.

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Foul weather

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Foul weather

Economic forces gang up to form a perfect storm that could destroy the state’s working waterfront.
By Edward Martin

Rising over his shoulder, the sun tints the sky east of Teaches Hole the color of ripe peaches. Skirting Ocracoke Inlet, Bill Evans points his 24-foot skiff toward Portsmouth Island. Evans, 38, has done this since high school, but he never tires of mornings like this. Playing nature’s lottery, a fisherman never knows what swims beneath the glassy green surface. Today, he’ll net about 800 pounds of Spanish mackerel, blues and slippery little butterfish.

In the afternoon haze, he ties up in Silver Lake, the tiny harbor encircled by the village of Ocracoke. The dock leads to the fish house, a two-story building with a store where customers buy seafood — $473,000 worth in the year ended in June. In a room in back, he tosses fish, most headed to wholesalers, into baskets according to size and kind. Like an apparition, in the doorway behind him appears an egret, a regular when fishing boats come in. “He gets his belly full every day,” Evans says. Buck, fishermen call him, short for buddy in the old-English brogue that persists here.

That dialect is fading before an onslaught of newcomers. With it, eventually may go Evans and his kind, the several dozen watermen who still set to sea from this village that has been synonymous with Tar Heel coastal life since Edward Teach — Blackbeard — prowled here in the early 1700s. Forty years ago, on a good day, fishermen might unload 50,000 pounds in the half-dozen fish and crab houses that ringed Silver Lake. Now there’s only Ocracoke Seafood Co. Then named South Point Market, it closed in 2005 but reopened last year after the Ocracoke Working Water-men’s Association — stubborn islanders such as Evans and volunteer organizer Robin Payne — scrambled to raise nearly a half-million dollars in cash and promises to buy and upgrade it. The effort went over the top this summer when the N.C. Rural Economic Development Center awarded a $325,000 grant to repay a loan obtained when it appeared South Point would be sold to developers.

Ocracoke Seafood isn’t alone in its precarious hold on North Carolina’s working waterfront. From Calabash on the South Carolina line to Currituck, more than 300 miles north near the back bays of Tidewater Virginia, marine industries have flourished nearly 400 years. A UNC Chapel Hill study found more than 3,500 such businesses, most in 20 coastal counties. Virtually all face a rising tide of tribulations. “Fishermen are nervous,” says Billy Carl Tillett, 57, a fourth-generation waterman at Moon Tillett Fish Co., named after his 77-year-old father, on Roanoke Island. It runs two trawlers, a fish house and freezing and processing operations. “We don’t know what our future is. Or if we have one.” For good reason, others say.

“A hundred years ago, if I were talking about Carteret County industry, the focus would have been commercial fishing and boating,” says David Inscoe, director of the Carteret County Economic Development Council in Morehead City and a member of a General Assembly-appointed committee to save the working waterfront. “Today it’s barely on my radar. Less than 3% of our marine industry comes from commercial fishing.” In 1995, the state seafood industry already was reeling from coastal development, ballooning regulation and competition from imports, but it ranked 10th in the nation. A decade later, it was 14th. Annual sales had plummeted from $109 million to $65 million, a tiny fraction of the $2 billion Tar Heels raked in raising hogs.

“Things that are big here, like shrimp, have been decimated,” says Scott Crosson, socioeconomics program manager of the N.C. Division of Marine Fisheries in Morehead City. “In inflation-adjusted dollars, shrimp is less than it was in 1970. In Brunswick County, you can buy shrimp from Vietnam for $3.50 a pound. That’s not worth taking your boat out.”

Fish houses, dockside markets where fishermen sell their catch, are falling like the barometer in a hurricane. From her home in tiny Gloucester, anthropologist Barbara Garrity-Blake, a member of the study committee, set out to tally them. From 2000 through 2006, 39 of 117 closed or were about to. More have since. “At one time, there were seven or eight here on Harkers Island. Now there are zero.” Local craftsmen, including her husband, are known for the skipjacks and skiffs they build, working boats suited for the shallow sounds. “A lot are doing other things — painting houses, construction, fishing elsewhere.”

Piers, which provide blue-collar access to the sea and a market for baitfish, have succumbed to storms and condominium and luxury-home developers. Of the 36 in 1980, there are fewer than 20 now. Public boat ramps and access to beaches are vanishing behind multimillion-dollar houses and no-trespassing signs. In Marshallberg, a fishing and boat-building village with fewer than 600 permanent residents on Core Sound, developers have filed plans for more than 350 residential lots. One bought land around the town harbor and is trying to shut out the public, says Karen Amspacher, whose grandparents moved here in the late 1800s. “Our community club has raised more than $80,000. We’re not going to give it up without a legal fight.”

Many, of course, say the change is inevitable and not all bad. A relatively new industry, building upscale boats, is thriving. Fishermen and fish-house operators — the average age is 60 — are getting record prices for their property. “Fishermen don’t have 401(k)s,” says Mercedes Tabano, a real-estate agent in the Outer Banks village of Duck and president of the 1,000-member Outer Banks Association of Realtors. “This is their retirement. A lot of sons don’t want to go into fishing or fish houses. There’re better jobs in construction.”

Visit the waterfront of Beaufort, called Fishtowne until it adopted its modern name — in 1723. “Private/members only,” signs on docks warn. On a Sunday afternoon, the public boat ramp is jammed. Tales circulate of developers offering $10,000 a foot for water frontage. A stone’s throw away, rusting smokestacks loom over a half-dozen metal buildings and storage tanks. From here, steamers once set to sea to scoop up tons of menhaden, a bony, unsavory little fish, and bring them back to be squeezed, baked and ground into oil, livestock feed and fertilizer. There once were eight menhaden plants in town. In a good year, Beaufort Fisheries grossed $5 million and employed 80. Developers, new arrivals and recreational fishermen complained about the smell, noise and interference with sport fishing. Three years ago, Beaufort Fisheries closed, the last fish factory in the state.

Pelicans loaf on faint breezes, then plunge into Pamlico Sound for fish. From the bridge of a boat, Hatteras emerges from the mist. North along two-lane N.C. 12, sand dunes creep onto the pavement. The Atlantic wades ashore in knee-keep breakers. There are myriad reasons North Carolina’s working waterfront is vanishing. In Outer Banks villages such as Rodanthe, Salvo and Avon, where houses routinely sell for more than $2 million, soaring real-estate prices are only one element creating the perfect storm.

It doesn’t begin here. Bump along puddled back streets of coastal villages to small, neat houses where rusting pickup trucks and aging work boats roost. Crosson, the socioeconomist, surveyed watermen to find that many make less than $25,000 a year and, depending on location, a third to two-thirds wouldn’t call themselves full-time fishermen, having to supplement that with other maritime work and construction jobs. ”When you take over a business from your parents, you find yourself working 65 hours a week and making $30,000 a year,” says Courtney Hackney, chairman of the N.C. Coastal Resources Commission. “Or you can sell the property for development and make $10 million overnight. It doesn’t take many people too long to figure out what to do.” With watermen worried about their futures — a third to nearly 60%, depending on where they live, told Crosson they don’t expect to be in the occupation 10 years hence — rising land values tip them into selling and punish those that resist.

Amspacher considers herself and her husband lucky. On the mainland where they live in Marshallberg, across Core Sound from Harkers Island, their taxes merely doubled after the last eight-year real-estate appraisal bumped their home’s value to $250,000. Her 78-year-old mother’s waterside house — three bedrooms, one bathroom and 1,400 square feet — jumped to $500,000. “When this buying-and-selling fever hit a year or two ago, she began getting letters every day. Three or four development groups were trying to buy up Harkers Island.”

Few counties or towns discourage loss of the working waterfront. They usually follow the siren song of swelling tax bases and boast of rapid growth. Brunswick County’s population has mushroomed 76% since 1990 — that of Currituck, Pender and Dare doubled — while the state as a whole grew only 31%. ”If they didn’t think it was in their best economic interests to let this happen, it wouldn’t be happening,” Hackney says. “But they see a fish house that’s worth $150,000 converted to condominiums worth $5 million.” In many places, a boat slip — dock space with an electrical hookup — costs as much as a house did 20 years ago. “You’re paying $150,000 for a hole in the water,” Hackney says. That has led to dry-stack slips, where boats are suspended to make room for more. Some near popular Morehead City developments sell for $100,000. “You’re buying a piece of air,” says Inscoe, the local economic developer.

Rocky Mount-based Market Opportunity Research Enterprises analyzes real-estate trends. It tracks prices by township — only part of a township might be on the water — but increasing values can still be startling. In many, they tripled between 2001 and 2006. Shallotte Township, south of Wilmington, is crisscrossed by tidal creeks. A residential lot averaged $56,481 in 2001. In 2006, the price had risen to $133,756. Using a common formula in which a lot represents about a fifth of a home’s value, a new house would typically sell for about $660,000. In Harnett Township, which includes Wrightsville Beach, residential lots that averaged $70,269 in 2001 reached $182,777 in 2006, indicating new-home value of more than $900,000. Rises like that have led to flipping, in which speculators attempt to resell lots quickly at inflated prices, and sight-unseen sales. Coastal real-estate agents advertise that they can handle sales, including closings, without the buyer’s presence or even surveys.

Once shunned, real estate on sounds and coastal rivers, traditionally the base of marine industries such as boat repair, has been discovered and marketed as the Inner Banks. Researchers say more than 100 subdivisions with 34,000 residential building permits have been approved on the Inner Banks and await construction.

Those new residents may have scant knowledge of local history and traditions and even less interest in them. Amspacher notes that more than half of Harker Island’s 1,200 electric bills are mailed elsewhere. “You’re seeing a dramatic change of culture and heritage,” adds state Senate President Pro Tem Marc Basnight, who grew up on a dirt road in Manteo and whose support of coastal projects has made him a hero to many waterfront business owners but drawn criticism from inland politicians. He coaxed the Rural Economic Center to make the grant Ocracoke Seafood needed to stay alive. “To this point, we’ve been totally ineffective locally and from the state and federal perspective in seeing that there’s access to the water for the public and the fishing industry that was the reason we settled here in the first place. Are we willing to allow that to disappear? It certainly looks like we’re moving that way.”

Another factor is the watermen themselves. They’re frustrated. On a recent summer day in , docks buzzed with news that Watersport, a long-line fishing boat, had just tied up, bringing in a 500-pound bluefin tuna. Prized for sushi in Japan, the species can sell for as much as $100 a pound. But while its hands swabbed the deck, Billy Carl Tillett was shaking his head at Moon Tillett Fish Co. “We handled one bluefin tuna a few years back, and the paperwork was so annoying, we swore we’d never pack another one.” Tillett, whose 34-year-old son runs the business, is among fishermen who say federal and state regulations are driving them out of business. On another day, a fisherman in Ocracoke had counted off eight regulatory agencies he reports to. “Hell,” Tillett snaps, “I’m surprised there weren’t more than that.” Rules determine the kind of fish that can be caught, when, size, types of equipment that can be used and other factors.

Crosson, of the state division of marine fisheries, is understanding but can promise no relief. “Commercial fishermen are sort of ornery, and they’re feeling pressure now from every quarter. But we’re dealing with an open-access resource. We don’t just impose these rules randomly. It’s our job to preserve the resources for all different user groups to make sure there’s enough of the resource left to reproduce.”

While regulators can monitor what repair shops spill in the water or what fishermen catch, the greatest factor in the storm that threatens watermen is the most elusive. Imported seafood has a stranglehold on Tar Heel prices, which trickles down into virtually every aspect of the working waterfront — engine repair to sale of oilskins. In the retail market on the ground floor below the steamy, knotty-pine-paneled office where Robin Payne pores over the books of Ocracoke Seafood, shrimp is selling for $10.95 per pound. Hours earlier, it was swimming in Tar Heel waters.

“Imports are generally half the price local shrimp would be,” he says. “They’re smaller and don’t taste the same, but restaurants and grocery stores sell them, and customers don’t know the difference.” The nonprofit Carteret Catch in Morehead City, founded in 2005, touts restaurants and seafood markets that carry only North Carolina products. Wholesalers and others frequently dwell on food safety — some seafood from Vietnam, China and elsewhere has been yanked from markets because it contains illegal antibiotics and other contaminants — but price usually trumps safety concerns. About 80% of the nation’s seafood is imported.

States cannot regulate international commerce, and experts say tariffs or quotas could trigger trade wars that might hurt Tar Heel fishermen. “Our fishermen can make fair money catching fish like tuna,” Crosson says. “I’ve seen the big Japanese sushi buyers rolling in here in the fall. They’re willing to pay big.” But, many watermen say, not big enough.

Still, some marine enterprises thrive, and successes often take odd turns. One is in Manns Harbor, population about 400, across Croatan Sound from Roanoke Island. It is a village of modest houses with neat yards, many with stacks of crab pots, and quiet streets where children play. And a revolution brewing.

“Developers were looking at the waterfront, and we knew what was about to happen,” says Robin Mann, finance manager and partner with her husband in Paul Mann Custom Boats. “One was a four- or five-story project of $1 million condos — and we’d already lost a couple of fish and crab houses.”

Some residents pressed Dare County to zone the unincorporated community to prevent that. Zoning in many small places often is regarded an unspeakable intrusion on private-property rights. “You could see the fear in their eyes,” she says. “‘Oh no! The government’s not going to tell me what to do with my property.’” But as people got wind of more development plans, they changed their minds. In May, Manns Harbor joined Wanchese and Stumpy Point, two other Dare County hamlets facing development, with regulations that permit such businesses — often home-based — as welding shops, crabbing and fish houses and boat building but prohibit big condos, big-box stores and strip malls.

In Wanchese, another twist to conventional wisdom is unfolding. On the gritty outskirts of the Roanoke Island village, a state project once derided as an ugly duckling hatched by pork-barrel politicians has transformed itself into an economic-development swan. Wanchese Seafood Industrial Park, built in the early ’80s at a cost of more than $8 million, was intended to lure fish canneries and processors. Legislators specified that it be used only for commercial-fishing enterprises — at the exact time commercial fishing began its decline. In an office on the 45-acre park, which wraps around a placid 15-acre manmade harbor, director Bob Peele traces its history. “Until about 1994, it was empty. It was considered kind of a failure.”

The fix was an amendment allowing all marine industries. By then, development pressure had begun driving businesses from waterfront locations. With its affordable lease rates — some waterfront sites lease for as little as 23 cents per square foot per year — the park is now full with 29 tenants, including boat builders, engine suppliers and repair shops. Only three are seafood-related. With nine companies on his waiting list, Peele says, “I wish we had another 40 acres.” Basnight has vowed to push for similar projects in at least two other coastal counties.

Few success stories, though, equal the rise of the luxury-boat industry in North Carolina. In a shop that sprawls over nearly an acre in Manns Harbor, smells of juniper and resin fill the air. Four sport-fishing yachts are in various stages of construction — the largest, at 81 feet, will sell for more than $5 million — at Paul Mann Custom Boats, which employs 44 craftsmen. Dare County alone has nearly two dozen boat builders. A member of the family the village is named for and a commercial fisherman until starting the business in 1988, Mann carries on the Tar Heel boat-building tradition. But many newer builders have their roots elsewhere. Brunswick Corp., a conglomerate based near Chicago, recently announced that it will build boats 45 feet and longer at a former Rampage Yachts building in Navassa, on the Cape Fear River in Brunswick County. The company said it will spend $51 million to upgrade the factory and hire 858 workers.

There’s a glimmer of hope on another front, too. In early August, the legislature adopted several key recommendations of the Waterfront Access Study Committee it had created in 2005, including taxing property of waterfront businesses based on its use rather than its market value. Lawmakers also authorized $20 million in borrowing to buy critical waterfront parcels. Maine and Florida have taken similar steps, though maybe too late. Peele says the marine industrial park frequently gets inquiries from Florida industries wanting to move.

The working waterfront may have one other asset that’s harder to define. In Wanchese, Billy Carl Tillett fumes over the plight of fishermen. His brother runs one of the family’s boats, crewed by his two sons. Moon Tillett Seafood employs eight full time, a number that soars to 30 or more seasonally when catches are good — and he can hire them. “Hiring captains and crews is hard.” His great-grandfather plied these waters in a boat propelled by sail. Now Tillett fantasizes about selling out. “My dad paid $30,000 or something like that for this in the ’70s. If we could get eight-10 million … ” He stops short and sighs. “Ah, that’s just dreaming. It gets in your blood. We’ll probably be right here 25 years from now. Still griping.”

For what it’s worth

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For what it’s worth

The SEC changed the rules, but that’s not what put a CEO without a salary at the top of our list.
By Frank Maley

Jim Rogers made more than $3 million in salary and bonus as chief executive of Cinergy Corp. in 2005, the year before the Cincinnati-based electric utility merged with Charlotte-based Duke Energy Corp. When he agreed to work for stock and options as Duke’s CEO last year, it made a good impression on shareholders but not his wife. “I can’t honestly say there wasn’t a comment from the other part of my team,” he admits.

Chances are, things will work out just fine for Team Rogers. Upon completion of the merger in April 2006, the company awarded him a stock-and-option package so big it made him the highest-paid CEO of the 75 largest public companies based in North Carolina. For the first time in four years, Bank of America Corp.’s Ken Lewis doesn’t top the list, compiled for Business North Carolina by the Charlotte office of human-resources consultant Findley Davies Inc.

That’s fitting because this year is one for breaking with tradition. At the direction of the U.S. Securities and Exchange Commission, most companies changed the way they report compensation; the rest will soon follow. That’s a step in the right direction, experts say, but it hasn’t ended debate over how best to set or evaluate CEO pay. “In compensation, there’s no absolute answer,” says Hank Federal, principal and market leader for Findley Davies’ Southeast compensation practice. The new requirements aim for one. Companies must tally CEO pay and report a total. But that number doesn’t represent what chief executives received, just what they cost the company during the year. The difference can be large. Duke, for example, reported that Rogers’ pay for the fiscal year that ended in December totaled $12.9 million. That’s not bad for nine months of work, but it underestimates what Duke actually gave him by more than $17 million, according to the pay formula BNC uses.

Most of Rogers’ compensation came from options that will vest over three years. Because their ultimate worth depends on stock fluctuations, there’s more than one way to value them. The SEC requires expensing options gradually during the vesting period, typically three to five years. Duke reported that the options for the 1.9 million shares cost it $4.7 million in 2006, but they could end up worth more or less to Rogers. By our estimate — using an equation that puts all CEOs on a level playing field — they are worth nearly $22 million.

The SEC method is designed to smooth out pay for CEOs that get big stock or option grants every few years. Rogers’ predecessor, Paul Anderson, represents an extreme case. After big grants in 2003 pushed him up to second on BNC’s annual ranking, he received no measurable compensation in the subsequent two years and fell to the bottom of the list. Under the new SEC rules, his annual changes in pay might have been less dramatic — but no more correct — than counting them in the year his stock and options were granted. “The good news is you can look at both,” says Robert Bushman, professor of accounting at UNC Chapel Hill’s Kenan-Flagler Business School. “If you feel like that smooth number is not what you really want to know, you can fix that.”

BNC and the SEC differ on another point: whether to include what the SEC calls “change in pension value and nonqualified deferred compensation earnings.” Our ranking doesn’t use the measure because it reflects changes in the value of income from previous periods. “If what he earns is a market rate of return, that’s not interesting,” Bushman says. “Why should I report a market rate of return? What I should report is if the company is paying him an extra-special return on that. I don’t think that column does a good job of separating those.”

The new rules prod companies to clarify and value perks under the heading of “all other compensation.” Use of corporate aircraft, car allowances, club memberships and company contributions to retirement plans are common among the larger companies. Rogers’ big-ticket item was $108,480 in legal and consulting fees that the company paid. But none of the companies with the 10 highest-paid Tar Heel CEOs reported outlandish fringe benefits. “I think some of the garbage has disappeared because people decided, ‘Well, do I really want to report that I’m giving my CEO this perk?’” Bushman says.

Companies are providing more analysis of executive pay. “We’ve gone from maybe five or six pages to 15 pages of narrative,” Federal says. But SEC Chairman Christopher Cox complained earlier this year that “the average Compensation Disclosure and Analysis section isn’t anywhere close to plain English. In fact, according to objective third-party testing, most of it’s as tough to read as a Ph.D. dissertation.“ Federal expects proxy statements to improve as companies get used to the new requirements.

By then, there might be a new king of compensation in North Carolina. If Rogers’ pay follows the trajectory of Anderson’s, it could drop significantly next year, according to BNC’s formula. That would leave the door open for some other CEO to claim the top spot. It might be Wachovia Corp.’s Ken Thompson, the perennial second-place finisher who earned more than Lewis this year but still finished second. Or it could be Lewis. Again.

Below is a partial breakdown of how companies are providing more analysis of executive pay.

Pay vs. Performance
2007
2006
CEO
Company
Symbol
HQ
Base
salary
(000s)
Change
Bonus
(000s)
Change
Stock
awards
(000s)
Option
grants
(000s)
Change
Long-term
cash awards
(000s)
Other
comp.
(000s)
Total
(000s)
Reported
comp.
(000s)
1
James E. Rogers
Duke Energy
(DUK)
Charlotte
0.0%
na
0.0%
na
$7,875.0 $21,885.8
na
0.0% $165.4 $29,926.2 $12,901.6
2
2
G. Kennedy Thompson
Wachovia
(WB)
Charlotte
1,090.0
0.0%
5,150.0
3.0%
9,064.0 12,291.5
45.6%
0.0 216.2 27,811.7 23,846.3
3
1
Kenneth D. Lewis
Bank of America
(BAC)
Charlotte
1,500.0
0.0
6,500.0
15.0
11,698.9 7,541.2
0.0
0.0 220.0 27,460.0 27,873.3
4
7
Thomas P. Mac Mahon
LabCorp
(LH)
Burlington
989.5
6.4
2,041.5
54.4
12,441.6 4,099.9
22.3
0.0 67.6 19,640.2 21,508.9
5
4
Mackey J. McDonald
VF
(VFC)
Greensboro
1,140.0
3.6
1,527.6
3.6
4,677.3 6,202.6
3.0
0.0 80.5 13,627.9 12,437.6
6
13
Marshall O. Larsen
Goodrich
(GR)
Charlotte
970.0
7.8
1,391.3
(16.2)
7,974.1 987.0
(13.6)
0.0 188.2 11,420.6 15,833.7
7
6
John A. Allison IV
BB&T
(BBT)
W-S
927.0
3.0
788.0
(19.7)
1,144.9 3,234.1
(8.3)
2,181.6 250.3 8,525.9 8,443.6
8
8
Daniel R. DiMicco
Nucor
(NUE)
Charlotte
725.0
2.5
2,011.9
22.3
5,694.6 0.0
(100.0)
0.0 2.7 8,434.1 8,555.9
9
5
Robert A. Niblock
Lowe’s
(LOW)
Mooresville
950.0
11.8
1,037.9
(59.3)
3,020.5 2,869.4
70.8
0.0 97.5 7,975.3 6,600.4
10
19
Susan M. Ivey
Reynolds American
(RAI)
W-S
1,135.0
9.8
2,223.0
41.8
3,604.1 0.0
0.0
0.0 206.9 7,169.0 8,169.9

To see the entire chart, click here to purchase a copy of the September 2007 issue.

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Admiral takes helm of leadership center

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People – September 2007

Admiral takes helm of leadership center
By Chris Roush
John Ryan isn’t just president of the Center for Creative Leadership, he’s a former customer. In 2001, Ryan, then a Navy admiral, took a course while examining executive-education programs for top brass. “I was supposed to go see five other organizations, but I called the head of the Navy and said I had found the right place.”

Ryan, 62, took over in June, after John Alexander retired, and he has big plans for what’s already a large organization. The Greensboro-based nonprofit employs 535 and grossed $81.9 million last year, more than 85% from tuition and training. It has offices in Colorado Springs, Colo., San Diego, Singapore and Brussels, Belgium, and teaches classes with partners in Africa. Former students include Rick Weddle, CEO of Research Triangle Foundation, and Michael Dell, chairman of the Texas-based computer maker that bears his name. About 20,000 people from more than 120 countries came through its programs last year.

But resting on laurels isn’t exactly a hallmark of creative leadership. Ryan wants to expand in Asia, Europe and Africa and open an office in South America. The center recently added a Chinese-language Web site and began a joint research venture in India.

It’s all part of what he calls his third career. Born in Harrisburg, Pa., he went to the U.S. Naval Academy to become a pilot. After graduating in 1967, Ryan flew reconnaissance out of Iceland and commanded forces in Asia, Europe and the Middle East. He got a master’s in administration from George Washington University in 1975 and in 1998 became superintendent of his alma mater.

He left the service in 2002 to become president of the State University of New York Maritime College in the Bronx. “Going from the military to higher education, I had to get a little more patience. It’s not like flying an airplane or turning an aircraft carrier. It takes longer to get things done.” That year, he joined the center’s board of governors. He later spent two years as chancellor of the State University of New York system, which has 80,000 employees. Running the center allows him to spend more time with his family.

Because of globalization and an aging work force, Ryan thinks leadership training is at a critical juncture. “There are millions of baby boomers out there in leadership positions getting ready to retire. Where are the next leaders going to come from?”

 

You could get away with accusing him of racin’ism

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People – August 2007

You could get away with accusing him of racin’ism
By Chris Roush

On weekends, Winston Kelley chats with NASCAR crew chiefs, drivers and mechanics as pit commentator for Motor Racing Network. But that’s not all he does these days. As executive director of the NASCAR Hall of Fame, slated to open in Charlotte in 2010, he’s involved in planning the building. He works with the sales-and-marketing manager to identify companies that might buy sponsorships. And he visits other museums to figure out how to operate the 130,000-square-foot NASCAR complex.

Altogether, Kelley, 50, says he puts in between 60 to 80 hours a week. “I’ve always been a workaholic. I never dreaded going to work.” Hired last year by the Charlotte Regional Visitors Authority, he has a five-person staff. More than $100 million of the $155 million project comes from a local hotel-occupancy tax. Much of the rest is from city and state funds. The attraction is expected to produce an annual economic boost of $62 million. Some will come from its 748 jobs; the rest, from visitor spending on hotels, restaurants and other services.

Racing has been a big part of Kelley’s life. He was born in Concord, and his father was public-relations director of Charlotte Motor Speedway from 1959 to 1964. His parents took him to his first Daytona 500 when he was 7. A photo of Richard Petty giving the 9-year-old Kelley an autograph hangs on his office wall.

After graduating from N.C. State University in 1979 with a major in business management and economics, he went to work for Duke Power. He held 13 jobs there and was vice president of economic and business development when he left. He represented the company on the team that persuaded Daytona Beach, Fla.-based NASCAR to put the Hall of Fame in Charlotte, rather than in Atlanta, Kansas City, Richmond, Va., or its hometown.

For most of the past two decades, Kelley has held a side job as a racing commentator. He joined the Motor Racing Network’s radio broadcasting team in 1988 and also has worked as an announcer at North Wilkesboro Speedway and Bristol Motor Speedway. From 2001 to 2004, he was a reporter for NASCAR This Morning on Fox Sports. Though he says the decision to leave Duke Energy was tough, racing was in his blood. “This was the opportunity to be part of building something from the ground up and to acknowledge and honor the sport I grew up around.”

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Town might take another’s course

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Tar Heel Tattler – August 2007

Town might take another’s course
By Edward Martin

To hear Leonard Cottom talk, Seven Devils is going to hell in a handbasket. The mountain town, which had a population of just 129 in the 2000 census but swells to many times that during the summer, might use eminent domain to take his golf course. He doesn’t want to sell it and wonders how Seven Devils could pay for it. The 18-hole, 105-acre course, he says, is probably worth 10 times the town’s $1.5 million annual budget.

That scares Mayor Bob Dodson. Courts ultimately resolve the value of property in contested condemnation cases. “If it goes to a jury,” the mayor says, “who knows what they’d do?” It might not come to that. The Town Council recently discussed leasing the links, an idea that Cottom, who owns the Hawksnest ski resort above the town, has not nixed.

Like many of the town’s snowbirds, who flee southward in the winter, Cottom comes from Florida. He retired to nearby Beech Mountain from Miami in 1975 and with his partners bought Hawksnest, a ski resort above the town, in 1992. They later bought the golf course.

Hawksnest has been the source of some of the bad blood between Cottom and the town. In 1997, when Cottom threw a party for college students, town police got wind of it and called in reinforcements. Nearly 50 cops crashed the event, leaving Cottom with $8,000 in booze and pizza. Youth are still wary of his place.

The latest strain in the relationship came after Cottom closed the golf course last year. Storms had damaged it, he says, and hardly any townspeople played there, which contributed to losses of up to $140,000 a year. Now weeds and briers are reclaiming it. “It’s an eyesore,” says Town Manager Brad Lambert. The town’s options include shortening the course to nine holes and building a park there.

But Cottom has plans for the land, too. He anticipates his ski crowds will double in a few years. “I’m going to have to park all those people somewhere,” he says. That riles townsfolk less than the prospect — which Cottom shrugs off — that he might build condos there.

So, who’s ahead? In late June, Cottom said he had got 212 petition signatures supporting him, which might seem unlikely in a town of 129 residents. Not so. The official census was taken off-season, says the mayor, who figures Seven Devils’ summer population reaches more than 1,000.

At a recent Town Council meeting, 11 speakers opposed taking the course by eminent domain, nine favored it, and eight said Seven Devils has no business puttering with golf.

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Tar Heel farmers face bumper crop of woes

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Economic Outlook – August 2007

Tar Heel farmers face bumper crop of woes

Tar Heel farmers never have it easy, but they seem to be facing more threats than usual this year — drought, high gasoline prices and threats of labor shortages. A freeze Easter weekend caused more than $105 million of losses, causing the U.S. Department of Agriculture to declare 47 counties disaster areas. State Agriculture Commissioner Steve Troxler looks at the lay of the land.

BNC: What’s the biggest issue facing North Carolina farmers?

Troxler: The outcome of immigration reform. Some of our crops are labor-intensive and perishable. We have to have a dependable labor supply. Without these workers harvesting them, these crops are not going to last.

Farmers fear crackdowns on illegal aliens?

That could be a real threat. Last year, some of our cucumbers were not harvested because of a labor shortage. People who had been buying North Carolina cucumbers had to go to foreign markets.

Are you saying agriculture depends on illegal activity?

No, it doesn’t. We do have a guest-worker program. Farmers look at the identification workers have and follow the law.

Then why worry about a crackdown?

It would affect every business that hires workers that could be illegal. The employer may identify a worker as being eligible to work by their documentation but have no way to know whether that documentation is legal or illegal.

So part of the work force may be illegal, even though farmers don’t know it.

That’s right. If immigration officials determine workers are not legal and take them out of a productive farm and there’s nobody to harvest the crops, it’s going to affect agriculture.

What are the components of a farmer-friendly immigration law?

One is control of the border. Another is the guest-worker program. We’ve got to have one that is affordable and workable. All of agriculture wants to have a legal work force. They don’t want to be worried about fines. They don’t want to be worried about workers being taken away. And the third component is dealing with the estimated 10 million to 12 million illegal workers that we have in this country in every type of business.

How badly did the late frost hurt?

Our peach crop was heavily damaged. The apples in the mountains were almost completely wiped out. There was damage to strawberries, blueberries and early hay crops.

Can those farmers recover this year?

No. Most of the fruit crops are produced by trees that take four years to yield. These farmers are going to be without income for a year. It makes it real tough on them.

How are farmers coping with high gasoline prices?

You have to be as efficient as you can. It takes a lot of energy to farm. Some of the pesticides and chemicals used in crops have also gone up as well. Without an increase in commodity prices to cover that, it’s not a good situation.

What can they do during a drought?

Some are turning to irrigation, but that raises the cost of production because you have to use electricity and gas to irrigate.

Is this year unusual?

Part of being a farmer is being a crisis manager. There are always issues to deal with, but a freeze and a drought make it much tougher. You never know how it’s going to turn out until it’s over and you find out the crop yield.

How do farmers manage the risks?

There is insurance on some crops, but it’s minimal. It would help with the production costs. And there is a federal program that would help. But right now, we don’t know how much.

Could these problems put farmers out of business?

Profit margin in farming is always an issue. You couple that with the pressure of development in North Carolina and we’re leading the nation in the disappearance of farmland —about 100,000 acres a year. That is going to change what North Carolina looks like if we don’t get serious about farmland preservation.

What other parts of the state economy will be affected by problems on the farm?

Suppliers — chemicals, fertilizers, equipment. Maybe a farmer’s truck has 200,000 miles on it and he needs a new one, but because he’s had a disaster he can’t do it. So there’s a truck that won’t be sold.

Could crop problems boost the price of livestock feed?

Everything is tied together in agriculture. We’ve seen the interest in renewable fuels. And right now, our ethanol production is based on corn. The livestock industry uses corn and soybeans as major feed components. So on one hand, we’ve produced renewable fuels. But the price of corn has risen, so the price of livestock feed has risen.

What are the biggest long-term issues for farmers?

Government policy will be the determining factor. The immigrant population in North Carolina, the disappearance of agricultural resources and the new federal farm bill will determine what agriculture in North Carolina will look like in the next 10 years.

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Run with the bulls

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Run with the bulls

It’s a major chore when Durham’s minor-league team plays at home.

 

Though management can be as furtive with the figures as a catcher signaling for the next pitch, the numbers are anything but bush league. These are the storied Durham Bulls, Triple A affiliates of the Tampa Bay Devil Rays. They began play 105 years ago as the Durham Tobacconists. The present name dates to 1912, when the team lifted it from Bull Durham, a popular brand of smoking tobacco. That was 76 years before the movie of that title, which made the team internationally known and solidified Kevin Costner’s status as a star. In addition to the fame, now fading, the film left the giant bull sign, originally a prop in the movie and now perched over the left-field fence. The beast’s eyes blaze red and its nostrils snort smoke when a Bull belts a homer. But its appeal is only one reason attendance at the 72 home games totals about a half-million each season. The team won’t say, but at $5 to $8 a ticket, the gate probably brings in $3 million or more. That doesn’t count what souvenirs and concessions contribute.

Since 1995, this 10,000-seat stadium has been the Bulls’ home, its red brick mirroring the tobacco factories that are turning into retail and residential space and its bankish facade a reflection of all the downtown development. On the day of a night game, head groundskeeper Scott Strickland arrives about 10 a.m. He and his two assistants begin mowing what’s grass and dragging smooth what’s not. Don’t call it dirt. You can pour 20 inches of water on the sand-based soil and play an hour later. “We maintain the field at the major-league level,” says Strickland, 24, who studied sports-turf management at N.C. State. “You can’t roll out the tarp and go home on a Friday night when you’ve got 10,000 tickets sold.”

Upstairs in the front office, a staff of 30 works through the day, while out on the field, Strickland obsesses. “Your worst nightmare is a player getting hurt because of something you did or didn’t do.” In the fall, he plants cool-season rye grass that greens up early, before the warm-weather Bermuda comes on. If he does it right, fans never notice change in hue. Cages come onto the field for batting practice, then off. The crew smooths the field again. The bullpen is sprinkled, the mound massaged. The afternoon wears on, but by 6:45, groundskeepers retreat in advance of the 7 o’clock start. “For the first couple of weeks, you watch the game,” Strickland says. “Then you get a little sick of baseball.”

As fans filter into the stands, Jamie Jenkins and his crews stir. His company runs the concessions. He’s secretive, too, about numbers, but simple math points to some big figures. A kiddie dog costs only $1.25, but a Hebrew National Big Boy will set you back $3, and a quarter-pound dog goes for $4. Need a beer to wash it down? It’s $3.75 to $6. Hot dogs are king, but chicken dinners are a close second in revenue, he says, adding, “We’re offering healthier versions of everything.” That includes turkey — not just pork — barbecue. At twilight, vendors circulate through the stands, barking out their fare. “Lemonade.” “Cotton candy.” “Funnel cakes.” At Wool E. Bull’s International Café, fish and chips, Italian sausages and burritos are moving. So is the night.

By 10, the game is over, the stands empty of fans. By 11, the stadium holds three people: Strickland and his two helpers. The big lights beam down. He smooths the mound. The job is never finished; the Bulls are home again tomorrow. “It’s a tough game we all play,” he says. He’s not talking about baseball.

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Prize catches

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Up Front: August 2007

Prize catches

How do you manage to do an award-winning personality profile of someone who, his friends as well as foes admit, doesn’t have a whole lot of personality? Especially when the subject of said piece won’t give you but a half-hour of his time and doesn’t deign to do that until you’ve finished the feature, months in the making, which you then have to rewrite, dashing out a couple thousand words in an afternoon, on deadline. Senior Editor Ed Martin managed that feat with the cover story that ran in our November 2006 issue. It captured a gold prize in this year’s Alliance of Area Business Publications Editorial Excellence Awards.

“Far from just another story about a banker, Martin’s profile of Bank of America CEO Ken Lewis puts the subject’s — and the bank’s — success in both a business and cultural context,” wrote the judges, members of the University of Missouri journalism faculty. “A strong narrative that doesn’t pull punches.”

It was one of five magazine awards Publisher Ben Kinney brought back from the AABP summer conference in Denver. The competition had drawn a record 722 entries from 59 regional business newspapers and magazines in the U.S., Canada and Australia. “The best of the AABP publications is measuring up well against highest standards of anyone covering this field,” said Daryl Moen, the journalism professor who coordinates the contest.

We won the silver prize for best magazine. “With its clean design and substantial content, Business North Carolina serves its audience with in-depth, contextualized coverage of the business environment. Feature stories that explain complex relationships in ways that are accessible to readers deserve special recognition.” Last year, we got the bronze prize in this category. We also took three bronze prizes this year.

Overall design: “This publication nicely executes a traditional layout approach. Cover designs show a variety of solutions even within a rigid structure. The publication is clean, consistent and easy to navigate. The pages all seem to reflect the seriousness and quality of the intelligent story content.”

Use of photography/illustrations: “This publication manages to do both illustrations and photography well. The cover illustrations demand readers look and read. The elegant multiple-image pieces do a great job of telling stories visually.” The judges cited the work of contributing illustrator Rob Edwards and freelance photographer Steve Exum.

Cover: “The combination of an outstanding caricature coupled with the right words make this an effective words-and-picture package. The drawing will attract the eye; the words will engage and amuse. The red-based color palette plays off the devil nicely.” When Rob did this illustration for our January 2006 issue, he was BNC’s art director. The work of the devilishly clever Mr. Edwards, who now resides in Florida, continues to grace our pages.

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