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Business/Economy

Alaska Native corporation in Sitka faces shareholder protest as revenues drop and CEO pay rises

The Alaska Native corporation Shee Atika in Sitka is in turmoil.

At the urban corporation's annual meeting last month, shareholders showed their displeasure with its leaders by turning their backs on board members and waving signs calling for removal of the board and the chief executive.

Company officials, alarmed by shareholder unrest, had two local police officers watching over the proceedings.

Shee Atika, one of more than 200 village corporations set up in 1971 under the Alaska Native Claims Settlement Act, once appeared to be one of the most successful. In 2010, annual revenues stood at over $180 million. The corporation's roughly 3,000 shareholders received benefits that year — dividends, scholarships and funeral assistance — worth close to $22.5 million.

But since then, the loss of federal contracts has sent revenues plummeting to a recent low of $2.3 million in 2014. Shareholder benefits have fallen when taking inflation into account. The company lost money for five straight years before bouncing back to more than $1 million last year. The return to profitability was based not on bringing in new business, but on selling an asset — corporation land in Cube Cove on Admiralty Island — to the federal government.

The sale rankled some shareholders who see land as a cultural touchstone and a tangible asset the corporation could pass on to future generations.

"We intuitively understand that our essence is our land," said shareholder Mike Kinville, who lives in Fairbanks. "In our bones we know that without it, our birthright is gone and we'd have to trust the board and CEO to be honest with our liquid assets."

Kinville and a large number of shareholders are also angry that the salary and benefits of CEO Ken Cameron, a shareholder and former dentist, have tended to rise even as the company's bottom line, or net income, remained in the red. Some shareholders grew more alarmed at the disconnect between Cameron's fortunes and the company's when Shee Atika announced in January plans to cut $1 million in costs, including official travel, office supplies and funeral benefits.

In 2016, Cameron made just over $411,000 in salary and retirement benefits, according to a company statement to shareholders. That's up from $385,000 in 2012. Information on Cameron's health benefits and life insurance was not included in the statement.

The cost reductions planned by the company this year included "wages and benefits by right-sizing staff," but Cameron did not respond when asked what his 2017 salary and benefits will be. The decision is made by the board, which he heads.

Videos of the annual meeting in May at the Sitka Fine Arts Camp show shareholders mingling and chatting at round tables. At one point, there is a call for what appears to be several dozen shareholders in attendance to turn their backs on the board. The recordings capture a couple of verbal arguments between shareholders and corporation officials over whether the meeting can be recorded.

Sitka police Chief Jeff Ankerfelt called the meeting "uneventful" and "really peaceful."

In a victory for the shareholder movement, an independent candidate, Laurence Garrity, was elected to the nine-member board.

Cameron emerged from the meeting with his standing as board chairman, president and chief executive intact, but shareholders are determined to keep fighting for his ouster.

CeeJay Johnson administers a closed Facebook group called Shee Atika Shareholders, sharing mostly critical information about the company with more than 1,000 members. Johnson helped organize an unofficial shareholder meeting in February in Sitka that was attended by 150 people. Shareholders at the meeting called for Cameron to step down.

"When we started talking about this two years ago, nobody cared. There were maybe five of us," she said. "Suddenly people are waking up."

Much of Shee Atika's revenue loss occurred after 2011, the most recent year the company benefited significantly from government contracting. Through a subsidiary called Shee Atika Languages, the company was involved in a partnership with Global Linguist Solutions of Herndon, Virginia, owned jointly by the large government contractor DynCorp International and engineering firm AECOM, to provide translation and interpreter services in Iraq and Afghanistan.

Court documents show Shee Atika sought its share of subcontracting revenues from Global Linguist Solutions in a lawsuit filed in July 2013 in U.S. District Court in Eastern Virginia. But GLS argued successfully that a government audit questioning Shee Atika's costs was the reason the Sitka corporation had not been paid.

Cameron sent an email to Alaska Dispatch News noting that the company is re-entering government contracting, a big source of business for Native corporations through the Small Business Administration's 8(a) program. Under 8(a), Alaska Native and other minority-owned businesses receive preferences for federal contracts.

Shee Atika in January announced that it formed a new subsidiary, American Marine and Technical Services, which it jointly owns with U.S. Navy contractor Rhoads Industries. The company expects to receive 8(a) status from the Small Business Administration sometime this year.

Kinville and Johnson said they support the company's efforts to resume government contracting work, but still hope to oust Cameron and other board members in next year's election and are planning a protest in front of the corporation's headquarters.

"Our elders can't even afford to die," said Johnson, referencing the cuts to funeral benefits. "We're losing all these things and they're selling all our land and yet their compensation goes up and up and up."

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