Calista’s president steers the right course

HARLEY SUNDOWN

May 02, 2008 at 1:04PM AKST

For The Tundra Drums

As a Calista Corp. board member, my privilege has been to serve the people of this Yukon-Kuskokwim Delta area.

During the last two years, I have overseen the tremendous profit potential and the current stages of growth our corporation has gone through. I also have seen the way our board members work with each other and with our current president and CEO, Matthew Nicolai.

Sometimes, our president has come under attacks so personal, over the newspapers, that it makes me wonder who would ever want a job like that.

There have been many letters to our president accusing him of controlling the board and enriching himself with his bonus.

As the newest member of the board, I can assure shareholders that no such control over the board exists, not from the president/CEO or anyone else. The board is very independent minded, very open and very vocal about the business of Calista Corp.

Our president’s bonus – called an incentive bonus – was established in the 1980s by the board. It is based on the earnings Calista makes over a certain time and threshold. It is based on the president getting a certain percentage of the profits that the corporation makes every year.

For instance, if our corporation earns $17 million, the Calista president may get $900,000 – based on the percentage formula. However, when examining the potential for huge bonuses as the corporation grew, the board capped the bonus limit for any president at $400,000 when it established the formula in the 1980s.

So any bonus Calista’s president gets today was established and then limited by the board back in the 1980s. Calista’s president has no say over what he gets as a bonus, so he has unfairly been under attack for that.

One of the things I have seen about our president during the past two years is that he is very good with math and economics. I marvel at him – without praising him – and his knack for turning around a company, which was losing millions yearly before he took over.

He has been so recognized by other predator corporations and he has been offered millions to run companies that need to be turned around.

At this point, the board cannot foresee losing a fellow Yup’ik who knows money and has led our company into positive cash flow these past years.

The other consideration that we, as a board, have yearly is his salary. The board in no way is influenced in what we may decide is his salary.

The president has every right to ask for a pay raise based on how the company is performing. The salary increase ensures a few things: One is that we keep him working with us instead of bolting to another company that may pay more to keep up with rising costs of doing business and industry standards.

Industry standards are a basis for what CEOs are paid at other companies with similar earnings and performance levels.

Our president will continue to get raises as long as the corporation continues to perform at this level.

I am very pleased at the direction we are trying to maintain as a company. This is reflected this spring in the first dividend to be issued in a long time.

With that, happy hunting and fishing this spring.

Harley Sundown is an educator and a member of the Calista Corp. board of directors. He can be reached at hsundown@loweryukon.org .