The Northwest's five top-paid CEOs last year received compensation worth a combined $93 million, representing a fourth of the entire value of pay packages for the 140 CEOs in Washington, Oregon and Idaho, according to data collected by executive-compensation research firm Equilar.

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James Voelker, the CEO of Bellevue technology company InfoSpace, received stock awards worth nearly $3.9 million and a salary topping $400,000 in 2007, a year in which he ranked as the Northwest’s best-paid chief executive.

Still, Voelker took over the top spot not because of his salary and stock awards, but because of $21.6 million in “make-whole” payments related to two special dividends that InfoSpace declared last year.

The company’s stock dropped roughly the same per-share amounts as the dividends to reflect the fact that it no longer had as much cash on hand, leaving Voelker with exercisable options suddenly worth about $21.6 million less. InfoSpace cut him a check to make up for the loss, and it gave him $12.1 million to cover the taxes he owed as a result.

In all, Voelker, 57, had a 2007 compensation package valued at $38.1 million, nearly 15 times as much as the average Northwest CEO.

“I won because shareholders won. All our employees won, too,” Voelker said. “If we deliver for shareholders and they actually get paid, then all of us, including the management team, should be paid as well.”

InfoSpace spokeswoman Stacy Ybarra noted that all employees with vested, in-the-money options — not just Voelker — received make-whole payments and “tax gross-ups” related to the $6.30- and $9-a-share dividends.

“You don’t want disgruntled employees or employees leaving,” she said.

The Northwest’s five top-paid CEOs last year received compensation worth a combined $93 million, representing a fourth of the entire value of 140 CEO pay packages in the Washington, Oregon and Idaho region, according to data collected by executive-compensation research firm Equilar.

Compensation is the sum of salary, bonuses, the grant-date value of stock and option awards made during the year, and a catchall category called “other,” which includes such things as life insurance, auto allowances, security and picking up the tax bill.

The Northwest’s largest pay packages tended to reflect the variety of compensation, though some companies scaled back on bonuses amid a widespread economic downturn, said Alexander Cwirko-Godycki, research manager at Equilar, based in the Bay Area.

Decline in median bonus

The median bonus for Northwest CEOs — meaning half received more, half received less — declined 16 percent to $269,106 in 2007 from $319,783 the year before. Also, 81 percent of Northwest CEOs received bonuses, down from 89 percent in 2006, according to Equilar.

“There seems to be an immediate connection between pay and performance. Some might argue that bonuses aren’t down enough, but 2007 was not a horrible year,” Cwirko-Godycki said. “2008 might be a different story. You may see a further drop-off if things don’t improve.”

Northwest companies also were less inclined to give CEOs stock options, as their prevalence fell to little less than half in 2007 from 53 percent the year before, according to Equilar.

Instead, companies tended to give stock awards, which, unlike options, retain some of their value if a stock price plummets. A little more than a half of Northwest CEOs received stock awards, up from 41 percent in 2006.

Here’s a look at other Northwest CEOs whose 2007 compensation ranked among the largest:

• Benjamin Wolff, 39, who was promoted to CEO of Clearwire in January 2007 after eight months as co-CEO, debuted at No. 2 with total compensation worth $15.1 million.

The Kirkland telecommunications company paid Wolff a salary of $705,462, plus a $630,000 bonus, $1.4 million in stock awards and options valued at $12.1 million, the most of any Northwest CEO.

Clearwire went public in March 2007 at $25 a share, but its stock ended the year down 45 percent at $13.71.

Clearwire spokeswoman Susan Johnston said in an e-mail that Wolff’s inclusion among the Northwest’s top-paid CEOs is misleading, since his options have strike prices of $25 and $23.30, well above Friday’s close of $13.81

Motivational tool

Options are meant to motivate executives to increase shareholder value by allowing them to buy stock at a predetermined price, also known as the strike price. Only when the stock trades above that price can the executive make money.

“For Benjamin Wolff to realize even one dollar of these option awards, Clearwire’s value must increase by more than $1.5 billion,” Johnston wrote. “To realize the $12.1 million, Clearwire’s value must increase by more than $3 billion from today’s value, translating to a stock price of nearly $40.”

• Kerry Killinger, Washington Mutual’s longtime CEO, fell to third on the pay list from his top spot last year after a venture into risky home loans caused the Seattle thrift to lose money for the first time since 1984.

Killinger, 58, received a 2007 pay package worth $14.4 million, primarily the result of $10.1 million in stock awards and a new grant of options on 355,800 shares.

He declined a bonus of $1.2 million, though it still will count in his retirement-pay calculations.

WaMu spokeswoman Darcy Donahoe-Wilmot noted that most of Killinger’s compensation is contingent on the company achieving business goals and creating shareholder value.

Still, the eight-figure package struck a raw nerve with some investors who held onto WaMu stock as it plummeted from $45.47 a share at the beginning of 2007 to $13.61 at year’s end. Their frustration intensified after WaMu disclosed, in March, that it had revised its bonus plan for top executives to minimize the impact of soured real-estate loans and foreclosure expenses.

Killinger announced during WaMu’s annual meeting the following month that the plan would be changed to include “specific credit-related targets for which we will be held accountable.” Details have yet to be released.

• John McAdam, 57, who became CEO of F5 Networks in mid-2000, when the Seattle company hired him away from IBM, received a pay package valued at $12.9 million, up from $885,650 in 2006.

His pay took three forms: a $495,508 salary, restricted shares worth $12 million, and a $420,283 bonus for meeting quarterly revenue and operating earnings targets.

(About $7.6 million of the shares were given in December 2006, but because F5’s fiscal year ends in September, they were included in the 2007 reporting period.)

F5, whose products allow companies to use software applications on multiple networks, hired compensation-consulting firm Towers Perrin to help it determine how much McAdam and other executives should be paid.

Towers Perrin subsequently analyzed F5’s compensation in relation to some 60 software-related companies that had revenues of between $200 million and $1 billion.

F5 would be on the lower end of that spectrum, since its fiscal 2007 revenues were $525.67 million, up 33 percent from $394.05 million in 2006.

Keith Grinstein, an F5 board member who chairs the compensation committee, said that for McAdam to receive as much as half of his restricted shares, the company must post revenue growth of at least 20 percent.

“I don’t think there’s another company in the Northwest that does that,” he said. “It’s a fairly high bar.”

Grinstein, who’s with the Seattle venture-capital firm Second Avenue Partners, praised McAdam as a “terrific” CEO, adding, “We’re lucky to have him.”

• Granger Cobb, 47, became co-CEO of Emeritus, a Seattle-based operator of assisted-living communities, last fall after leading Summerville Senior Living in San Ramon, Calif. Emeritus bought Summerville for 8.5 million shares of stock and signed Cobb to a five-year employment agreement.

Cobb splits CEO duties with Chairman Daniel Baty, an Emeritus founder and one of the company’s largest shareholders. The company has lost money in four of the last five years.

Emeritus set Cobb’s base salary at $600,000, with annual cost-of-living adjustments of no less than 5 percent.

Cobb also received 194,125 shares worth $5.3 million and 500,000 options valued at $6.5 million, for $12.5 million in total compensation.

Cobb described the stock award as a “one-shot deal” resulting from the Summerville acquisition, and he noted that his options vest at an annual rate of 20 percent over five years.

“It was very important to me to have the options going forward,” Cobb said. “I really believe in the upside potential of Emeritus.”

Amy Martinez: 206-464-2923 or