NEW YORK -- The salary of John J. Pomerantz, chairman and chief executive officer of The Leslie Fay Cos., in 1993 remained the same as in 1992 and 1991, although last year he paid back a chunk of his bonus and profit sharing granted for 1990 and...
NEW YORK -- The salary of John J. Pomerantz, chairman and chief executive officer of The Leslie Fay Cos., in 1993 remained the same as in 1992 and 1991, although last year he paid back a chunk of his bonus and profit sharing granted for 1990 and 1991.
Leslie Fay's Form 10-K, filed last week with the Securities and Exchange Commission, puts Pomerantz's salary for each of the three years at $798,915.
It also shows that as a result of the restatement in September of financial results for 1990 and 1991 stemming from an accounting scandal that turned profits into losses, Pomerantz repaid $1,627,943 of combined bonus and profit-sharing payments, reducing his bonus to $1,928,457. The emergence of the accounting scandal also forced the company into Chapter 11, where it has been operating since April 1993.
The 10-K, which also serves as an annual report to stockholders, confirms that in February 1993, the U.S. Attorney for the Middle District of Pennsylvania, based in Harrisburg, issued a grand jury subpoena seeking the production of documents as a result of the company's announcement of accounting irregularities. A spokeswoman for the U.S. Attorney's Office said Monday she could not comment on the status of the investigation as matter of policy.
In the report, Leslie Fay said it is cooperating with an SEC investigation that was also initiated in February 1993. The report said the SEC obtained an order directing a private investigation of the company in connection with the filings of annual reports.
In other salary disclosures, the 10-K shows that Alan Golub, who retired in late 1992 as president and chief operating officer, repaid $924,240 of his bonus and profit-sharing payments, and Ralph Iannazone, former vice president-manufacturing, repaid $72,209.
The 10-K also lists salaries of other top paid officials. Michael J. Babcock, who joined the company in September 1992 as president and chief operating officer, was paid $700,000 in 1993, and $137,500 in 1992. John Ward, who moved up last year from chairman of the sportswear division to corporate senior vice president, made $400,000 in salary and $$139,005 in bonus in 1993. In 1992, his salary was $300,000, and his bonus was $239,005. The figures were the same in 1991.Laura Pomerantz, executive vice president, had a salary of $425,000 in 1993 and 1992. In 1992, she was also given a bonus of $85,000.
Although the company has previously stated that domestic production accounted for about half of its overall manufacturing, the 10-K states that for 1993 products representing 72 percent of sales were produced abroad and imported into the U.S., principally from Hong Kong, China, Taiwan, Korea, Malaysia, the Philippines, Hungary, India and the Caribbean Basin. A company spokesman could not account for the discrepancy.
Meanwhile, on Monday, the ILGWU stepped up its battle with the company. In front of 37 stores in 28 cities, the union handed out leaflets asking consumer support in the effort to persuade the apparel maker not to close its U.S. production facilities.
Last month, as part of its negotiations with the ILGWU for a new three-year contract, Leslie Fay proposed closing its sewing factories in Wilkes Barre, Pa., which the union says would eliminate about 2,000 jobs. Leslie Fay puts the number at about 1,200. The union's contract with Leslie Fay and other manufacturers runs out May 31.
Union officials said the action, which targets 37 major stores across the country -- including Macy's, Dillard's, Neiman Marcus, Nordstrom and Montgomery Ward -- that carry Leslie Fay products asks shoppers to contact Leslie Fay to express support for the workers. The union said the action also serves notice to the retailers that the workers expect their full support if a boycott of Leslie Fay products takes place.
In a letter sent to top executives of the retailers being leafleted, ILGWU president Jay Mazur cautioned that the large retail chains would bear the brunt of "an intensive, massive and sustained consumer boycott campaign aimed at Leslie Fay customers," if they continued to stock Leslie Fay products.
A spokesman for Leslie Fay called the leafleting and proposed boycott "counterproductive," and said the "company is just doing what it needs to do in order to survive." Leslie Fay said it needs to turn to imports to lower costs and stay competitive.
"It's not realistic, or productive or smart to try to hurt a company economically that is struggling to survive," the Leslie Fay spokesman said.In a separate development, the company said it expects its DIP credit agreement of $100 million running through Jan. 31, 1995 to be approved today in bankruptcy court.
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