Furniture Brands axes bonuses
By Larry Thomas -- Furniture Today, March 15, 2010
ST. LOUIS —
Most senior executives at Furniture Brands International did not receive salary increases, bonuses, stock options or long-term compensation in 2009 due to a decline in the company's financial performance, according to a preliminary proxy statement filed with the Securities and Exchange Commission.
The filing said the executives were eligible for a bonus, but didn't receive one because Furniture Brands failed to meet two financial targets established by the board of directors.
As a result, the salary of Chairman and CEO Ralph Scozzafava remained at $750,000 in 2009, and Chief Financial Officer Steven Rolls' salary remained at $475,000.
Other salaries listed in the filing were $350,000 for Jon Botsford, senior vice president and general counsel; $390,000 for Edward Teplitz, president of the Thomasville and Drexel Heritage brands; and $388,077 for Raymond Johnson, who joined the company in February 2009 as senior vice president, global supply chain.
The only executive who received a bonus was Johnson, who got a $150,000 signing bonus. He also received 15,000 shares of Furniture Brands restricted stock and 30,000 stock options upon hiring.
None of the others received stock or stock options, according to the regulatory filing.
All five could have earned bonuses based on 2009 financial performance, but the filing said Furniture Brands failed to meet the board's goals of a break-even year with net sales of $1.26 billion.
The company had net sales of $1.22 billion last year and a net loss of $108.7 million.
The executives also received matching contributions to the company's 401(k) plan and various relocation, temporary housing and commuting expenses. In addition, they received tax gross-up payments for the taxable portion of those expenses.
Besides 401(k) matching contributions, the only other compensation reported for Scozzafava was $85,194 for the value of personal use of the company's airplane.
A year ago, the company was widely criticized for awarding more than $10 million in long-term incentive pay in 2008 — a year in which its stock price fell more than 80% and hundreds of jobs were eliminated. FBI said those payments were largely based on free cash flow in 2007 and 2008.
The filing said the board has reinstated the long-term incentive plan for 2010, but said such compensation would be a combination of cash and equity instead of the all-cash awards as in the past.
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