In the face of slumping sales and massive expense reductions, The Talbots Inc. said it would pay its chief executive officer and president Trudy F. Sullivan $1.2 million to offset the recent reductions in her retirement benefits.
According to a regulatory filing with the Securities and Exchange Commission, the Hingham, Mass.-based firm said that, because of the terms of Sullivan’s employment contract, penned in 2007, it was obligated to compensate her for any loss in benefits. As a result, Sullivan will receive six installments of $200,000 over the next six months.
Since February, the struggling misses’ apparel retailer has cut roughly 700 jobs and suspended its quarterly dividend and pension plan. In 2008, the company widened its net loss to $560.7 million, or $10.49 a share, from $188.9 million, or 3.56 a share, in the prior year. Annual revenue slid 12.5 percent, to $1.5 billion from $1.71 billion, and same-store sales were off 14.2 percent.
Last year, Sullivan saw her total compensation drop 18.1 percent to $5.7 million from $6.9 million in 2007.