$4 Million Dollar Man
A lawsuit brought by the state and Bhajan religious leaders challenges salaries at food company Golden Temple
By Sherri Buri McDonald, The Register-Guard
Posted: Friday, May 13, 2011 | 03:11 pm
In the league of larger firms
CEO Kartar Khalsa testified that his annual income jumped from $1.3 million in 2007 to more than $2.7 million in 2009, according to excerpts from a March deposition recently filed with the court.
He testified that his estimated 2010 compensation exceeded $4 million, including his $900,000 base salary and his share of the profits from the May 2010 cereal business sale.
That is extremely high annual compensation for a business the size of Golden Temple, according to analysts. Joe Meissner, president of Executive Capital Partners, a Portland business that matches seasoned CEOs with private equity groups, said the base salary for the CEO of a company with revenue of $125 million typically would be $200,000 to $300,000.
Kartar Khalsa’s annual compensation in recent years is more in the league of much larger, publicly traded companies, according to a report by Equilar, an executive compensation data firm.
Median total compensation last year was $2.2 million for CEOs of S&P 600 firms, Equilar reported. The companies in the study had median revenue last year of $5.9 billion — 47 times greater than Golden Temple’s $125 million annual revenue before it sold its cereal division to Hearthside.
The price Hearthside paid is sealed in the court record, making it unavailable to the public. It is estimated to exceed $40 million, based on other figures in the court record. The court has required that the proceeds be held in escrow until the lawsuit is resolved, so that money has not actually been distributed to members of Golden Temple Management.
In its lawsuit, the state asks for damages against the four Unto Infinity board members of $17 million — the difference between the cereal division’s fair market value when it was sold to Hearthside, and the amount KIIT Co. actually received.
KIIT Co., which owned Golden Temple prior to the 2007 restructuring, was to receive at least $23 million — Golden Temple’s appraised value in 2007 — if Golden Temple were sold, according to the documents outlining the restructuring.
The state also asks that the Unto Infinity members be removed and a receiver be appointed, and that the six Golden Temple managers return their interest in the company and repay any income and benefits derived from it.
Davis, the attorney for Golden Temple Management, including Kartar Khalsa, said “we believe (the state’s) claim to be ill-founded, and it will be shown to be so at trial.”
Unto Infinity’s attorney, Nathan Christensen said, “We’re looking forward to defending our case at trial.”