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Finance Committee Call
Minutes from July 9, 2010

 

Participants: Geordie Hall, Eric Schoenholz, Lars Bruns, Pete Ludlow, Gary Lange ‘ Jim Elkind, Jamey Wimble, Liz Godwin, Leigh Michl, Bob Ackland, George Lesure and Roy Liu

 

- Jamey Wimble presented the June estimated P&L and reviewed cash variance from last FC meeting in May:

 

1. Discussion again focused around understanding how the Mad Card accruals flow through the P&L and its accounting effects on cash balances at the end of the season.

 

2. Eric Schoenholz expressed some confusion as to why the cash balance had chanced since what Jamey had presented in prior FC calls. It was clarified that the cash balance will be at negative variance to what was presented to FC members, but not to Board members, as there was an updated cashflow presentation at the June board meeting. The cashflow chart and variance analysis circulated for this call highlighted and reconciled the differences.

 

3. June P&L: “Day ticket revenues” was a partnership payment from Sugarbush on the “Ski the Valley” program (question was emailed by John Stetson).

 

Revenues were slightly higher than plan due to higher-than-forecasted # of events held at the mountain in June.

 

- Incentive Plan: Discussion was opened regarding evaluation of the plan; Leigh Michl asked generally how the program works. Jamey explained how the percentage incentive works.

 

Geordie: dissented as to both the structure of the program, and the timing of the payout. Geordie believes that at a minimum, any bonus should be paid out in two parts: 50% at the end of the season, and the remainder at the beginning of the following season (if this is really to be a retention program). Geordie also stated that with a minimum $200k NOI as the trigger for starting bonuses is too high a level. Geordie is voting “no”, because he believes the Coop should be working to put a plan in place that will do better by the employees, he doesn’t think this incentive plan will genuinely reward the employees for their work.

 

Eric S stated that there was a lot of previous discussion and review by earlier boards that concluded that $200k NOI was a min amount that the Coop needs to make every year for pure sustainability.

 

Bob Ackland also stated that there are not many ski areas that have a good incentive program; this is one of the better plans that he’s seen based on his experience. Bob feels that the current compensation at MRG is already pretty good relative to the overall ski industry, so the overall employee pay and compensation needs to be put in context relative to the ski industry.

 

Lars mentioned that there had historically been a lot of debate around this incentive plan, and that the debate could extend indefinitely; interested parties who feel that strongly about potential shortcomings of the plan should take the initiative to generate an alternative proposal that addresses concerns that have been raised.

 

Motion to recommend the incentive plan be accepted and approved by the Board was seconded and passed with Geordie as dissenting vote (he doesn’t think this plan meaningfully and properly compensates employees).

 

 

Respectively submitted by,

 

 

Roy Liu

Treasurer

Mad River Glen Ski Cooperative

 

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