William L. McComb, chief executive officer of Liz Claiborne Inc., took a more than 30 percent cut in compensation last year as he led the firm through a continuing reorganization in the midst of a severe economic downturn.
McComb’s total earnings came to $3.5 million, 30.7 percent below the prior-year level of $5 million. His salary remained at $1.3 million. Whereas in 2008 he received $3.4 million in stock and option awards, last year he received a $942,000 option award but, as with the other named executive officers covered in Claiborne’s definitive proxy statement, no stock awards.
Because of vesting schedules and fluctuating stock prices, these awards weren’t necessarily realized by the executives but are reported to the Securities and Exchange Commission when companies file their proxies, as Claiborne did Tuesday.
While he received no bonus, as in 2008, McComb did earn $975,000 in nonequity incentive plan compensation versus none in the prior year. The achievement of individual goals accounts for 40 percent of these earnings and financial performance the balance. In Claiborne’s case, cash flow from continuing operations last year came to $224 million, below the $250 million target, and adjusted total selling, general and administrative expenses $1.55 billion, above the $1.6 billion target. Total debt at constant currency ended the year at $642 million, above the $575 million target level.
The incentive bonus equaled half of McComb’s potential payout of $1.9 million, or 150 percent of his base salary.
In February, Claiborne reported a reduced net loss for the year of $306.4 million, versus a loss of $951.6 million in 2008, while sales slid 24.4 percent to $3.01 billion from $3.98 billion in the prior year.
Coming off a year of higher profits, Warnaco Group Inc. reported in its proxy that Joseph Gromek, president and ceo, experienced a 9.7 percent decline in compensation, to $6.2 million from $6.9 million in 2008.
Gromek’s salary rose 1.5 percent to $1.1 million, but his stock and option awards fell 26.2 percent to $2.6 million from $3.5 million in 2008, and he received no bonus, as compared with the $729,000 discretionary bonus granted for 2008.
However, with Warnaco exceeding maximum levels established by its compensation committee, Gromek’s nonequity incentive plan compensation leaped to $2.1 million, 87.5 percent higher than in 2008. This payout was based primarily on Warnaco’s earnings per diluted share last year which, on a GAAP basis, rose to $2.05 from $1.00 in 2008. Net income more than doubled to $98.5 million as revenues receded 2.1 percent to $2.02 billion.
Also disclosed Tuesday was AnnTaylor Stores Corp.’s proxy. Kay Krill, president and ceo, saw her total compensation gain 13.8 percent last year, to $9.1 million from $8 million in 2008, as increases in her nonequity incentive plan compensation more than made up for a decline in stock and option awards.
Krill’s salary held steady at $1.2 million last year as the compensation committee of AnnTaylor’s board elected to freeze salaries for 2009 and 2010 as well. While the sum of her stock and option awards fell 28.3 percent, to $3.4 million from $4.8 million, her incentive plan bonus more than doubled, to $4.3 million from $1.9 million. Other compensation fell 38.3 percent to $101,000 and the firm recorded a $44,000 increase in pension value and nonqualified deferred compensation earnings.
Last year the firm registered a net loss of $18.2 million, lower than the $333.9 million loss weighed down by a variety of charges in 2008. Sales fell 16.7 percent, to $1.83 billion from $2.19 billion in the prior year, as same-store sales dropped 17.8 percent.
Among the objectives achieved by the firm in fiscal 2009 were reduced expenses, an improved cash position, a higher stock price and the first steps in the evolution of its Ann Taylor brand.
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