FIVE TOP WARD’S EXECS GONE SINCE EARLY DEC.
Byline: Thomas J. Ryan
NEW YORK — Five of Montgomery Ward’s top executives have left the firm since the start of December, according to the troubled retailer’s proxy statement.
As reported, Bernard Brennan, chairman and chief executive officer, resigned his ceo post Dec. 10, 1996. As part of his termination agreement, Brennan, who had been ceo since 1985, received a $12.5 million loan without interest from Ward’s secured by Brennan’s Ward’s shares. Brennan, who continues as chairman, owns 88 percent of the class A shares of Ward’s, but GE Capital controls the board of directors through its ownership of all the class B shares.
Other executives who have left Ward’s include Frederick E. Meiser, head of the Lechmere furniture chain, in December 1996; Edwin G. Pohlmann, executive vice president of merchandise and store operations, in January; Joseph Reddington, ceo of the Signature Financial Marketing division, in February, and Robert J. Stevenish, executive vice president of stores and logistics, in March.
Reddington received $1 million in severance payments, and Stevenish, $750,000. Severance payments, if any, to Meiser and Pohlmann were not disclosed.
Continuing executives include Michael Searles, who became president of apparel in June 1996, and Spencer H. Heine, executive vice president, secretary and general counsel. Heine has since become interim ceo at Signature.
GE Capital has put in a new management team in an effort to turn around Ward’s losses, which amounted to $237 million for 1996. Also, Ward’s indicated that it will lose $140 million in the first quarter of 1997 and $108 million in the second.
Roger Goddu, who became president and ceo last Dec. 20, has a contract calling for a $1 million base salary plus an minimum annual bonus of at least $350,000 over three years. Goddu also received $2.2 million in compensation for benefits lost when he left his post as president of U.S. merchandising at Toys “R” Us. He also received a $2 million low-interest loan from Ward’s payable in five years.
Searles, former chief executive at Casual Corner, will receive a base salary of $500,000 plus a guaranteed bonus of at least $250,000 this year.
Other new executives are Burnett W. Donoho, who became chief operating officer in January. Donoho most recently headed his own consulting firm and was a former chief operating officer at Broadway stores.
Thomas G. Grimes, who became president of hardlines in January, was formerly managing director at Trimingham Bros. Ltd. Karl Taylor, who became senior vice president of strategic and merchandise planning in February, held a similar position at Toys “R” Us. Compensation for these new executives weren’t included in the proxy.
The 408-unit retailer and direct marketing company, based in Chicago, has embarked on a turnaround program calling for narrower assortments and a focus on higher-margin merchandise in order to reposition itself as a value-priced alternative to department stores.
The financial community is concerned that GE Capital may not continue to support the company after Aug. 29, when $1 billion in bank debt comes due. Trade claims against Ward’s recently have been quoted at about 90 cents on the dollar by vulture funds.