NEW YORK — Saks Inc. awarded top executives bonuses in 2005 for meeting business objectives, despite posting a loss on lower sales for its most recent fiscal year.
R. Brad Martin, chairman, was awarded $265,219 on top of a base salary of $1.08 million and $3 million worth of restricted stock awards. In 2004, Martin received no bonus, a $1.05 million base salary and $7.4 million in restricted stock awards. Stephen Sadove, chief executive officer, received a bonus of $467,897, a base salary of $1 million and $2.2 million in restricted stocks, which compares with $250,000, $980,000 and $1.8 million, respectively, in 2004.
The proxy stated that bonuses were paid "against profit targets and key corporate objectives," but did not reveal details of those objectives. Last year, the retailer sold its department store group, and delivered higher, year-over-year operating profits even as total revenue, gross profits and net income declined. The company could not be reached for comment.
Aside from Martin and Sadove, James Coggin, president and chief administrative officer, and Douglas Coltharp, executive vice president and chief financial officer, were also awarded higher salaries and bonuses for 2005, according to a preliminary proxy statement filed by Saks Inc. on Thursday. The filing also showed that Martin received "other annual compensation" worth $127,971, which was for the "personal use of airplane" in 2005.
The proxy revealed that Martin and Sadove secured agreements that allow them to receive a minimum of three times their base salaries if their employment is terminated with "good reason," which would include a change of control of the company.
The proxy stated that the employment agreements "generally provide for the acceleration of equity grants and a lump-sum cash payment."
In August, the retailer completed an internal investigation and said it would reimburse vendors for more than $48 million in improperly collected markdown allowances between 1996 and 2003. The investigation resulted in the ouster of three senior executives earlier in the year, including Brian Martin, a senior vice president of Saks Inc. He is the brother of R. Brad Martin.
According to the proxy, Brian Martin was employed at the company until June 17 and received a salary of $47,836. He also "realized proceeds" of $1.7 million from the exercising of his stock options, which were previously granted.Shares of the company closed up 0.6 percent Thursday to $19.33. The stock's 52-week high is $24.64, and the low is $15.73. In 2005, the stock's performance was better than 2004, where it lagged below $10 a share for several months.
For 2005, the retailer's total revenue dropped 7.4 percent to $5.95 billion from $6.43 billion in the prior year while net income fell to $22.3 million from $61.1 million. Operating income for the year rose 4.1 percent to $202 million from $194 million.
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