NEW YORK — Terry Lundgren, chairman, president and chief executive officer of Federated Department Stores, has a new pay package that increased his 2005 base salary.
Lundgren, the architect of Federated’s planned merger with May Department Stores Co., received a 9 percent pay boost to $1.3 million from $1.19 million, according to a regulatory filing last Friday with the Securities and Exchange Commission.
In addition, Lundgren received a cash bonus of $3.3 million for 2004, compared with $2.49 million in 2003. His total compensation has gone up 22 percent since 2003, to $4.49 million from $3.68 million.
The Federated board met on March 25 to renegotiate Lundgren’s compensation. He is set to continue to serve in his current roles through Feb. 28, 2007.
The board also granted Lundgren 275,000 stock options valued at $61.07 each. The options will vest 25 percent a year, until March 25, 2007.
Federated, based in Cincinnati, operates department stores under the Macy’s and Bloomingdale’s nameplates. In a deal that will reshape the retail landscape, Federated announced on Feb. 28 that it will merge with May. The merger was valued at $17 billion, including May’s $6 billion in debt. May, based in St. Louis, owns nameplates such as Lord & Taylor, Kaufmann’s, Strawbridge’s and Marshall Field’s.
Completion of the deal is contingent on regulatory review and approval by the shareholders of both companies, a process that is expected to take several months. The transaction is forecast to close in the third quarter of 2005.