Final irony: Perdue highest paid in '02

Don Hogsett, October 20, 2003

Lending a final, almost surreal coda to the collapse and demise of Pillowtex Corp., and the attendant loss of roughly 8,000 jobs, the highest paid executive in the entire home fashions industry last year, pulling down $2.4 million, was David Perdue. The former chairman and ceo of Pillowtex jumped ship after just 10 months on the job, taking with him a substantial signing bonus that lured him to the company he ultimately spurned.

For the short time he was on the job, Perdue took home a cash salary of $313,000, and another $2.1 million as a bonus from a company that never made money on his watch.

As if to suggest that failure pays better than success, in striking contrast the second highest-paid executive during 2002, taking home just half as much as Perdue, 1.1 million, was Jeffrey Lorberbaum, the president and ceo of Mohawk Industries, one of the most successful, and profitable, companies in the industry.

In the show position was John Bakane, president and ceo of Cone Mills, the big denim producer, which counts among its home fashions holdings Cone Jacquard and Carlisle finishing, the largest commission printer in the United States.

Among the other ironies of this year's Home Textiles Today Executive Compensation Survey, three of the five top spots on the ranking are leaders of companies that are now bankrupt— Perdue at Pillowtex, Bakane at Cone and Holcombe Greene Jr., former chairman and ceo of WestPoint Stevens, ousted earlier this year as the cash strapped and heavily indebted company was thrust into bankruptcy. Greene pulled down $899,000, down modestly from $899??? in 2001.

Reflecting the modestly improved circumstances of the industry in 2002 — as a rule, ceo's do as well as their companies, no better — there were more pay raises last year than in 2001. Last year, eight executives took home more pay, while five took home less. That's almost the opposite of the year before, when twice as many senior execs took a pay cut as got raises — seven losing ground, while only four advanced.

Among the more striking findings of this year's canvass: it was better to be a worker-bee than the boss at Quaker Fabric last year. Demonstrating that the buck really does stop with him, Larry Liebenow, ceo, gave himself only a modest raise last year as the company's sales and earnings both declined. Liebenow took home $660,000 in 2002, up just 3.1 percent from the year before, roughly in line with the rate of inflation, and the kind of raise that most American workers received.

But two of his workers took home a lot more than he did, thanks to stock options they exercised. Beatrice Spires, vp of design and merchandising, took home $722,000 after adding in $402,000 worth of options. Her base pay totaled $320,000, up 8.5 percent from $295,000 in 2000, meaning her raise was more than twice as big as her boss's. Tom Muzekari, vp of sales, made $695,000, $227,000 in pay, and another $468,000 in options.

Dollar amounts in thousands

Name, Title Company Total cash, stock options exercised Salary 2002 Bonus 2002 Long-term incentive plan Total cash compensation Value of stock options exercised Total cash comp. 3-yr. % chg. 2000-2002
David A. Perdue, former chairman and ceo Pillowtex $2,425 $313 $2,113 $0 $2,425 $0 —%
Jeffrey S. Lorberbaum, president and ceo Mohawk 1,334 635 699 0 1,334 0 55.4
John L. Bakane, president and ceo Cone Mills 920 513 407 0 920 0 79.7
William B. Kilbride, president, Mohawk Home Mohawk 828 345 244 0 589 238 25.9
Holcombe T. Green Jr., chairman and ceo WestPoint Stevens 825 825 0 0 825 0 -0.6
Joseph L. Lanier, chairman and ceo Dan River 773 567 206 0 773 0 21.1
M. Beatrice Spires, vp, design and merchandising Quaker Fabric 722 320 0 0 320 402 -7.4
Thomas Muzekari, vp, sales Quaker Fabric 695 227 0 0 227 468 -17.8
Larry A. Liebenow, president and ceo Quaker Fabric 660 660 0 0 660 0 -20.3
Richard L. Williams, president and coo Dan River 605 444 161 0 605 0 21.0
E. Randall Chestnut, chairman, president and ceo Crown Crafts 573 363 210 0 573 0 91.0
M. L. "Chip" Fontenot, president and coo WestPoint Stevens 465 465 0 0 465 0
Marvin A. Woolen Jr., vp, cotton purchasing Cone Mills 407 255 152 0 407 0 49.5
Michael R. Harmon, president Pillowtex 400 350 50 0 400 0
Mark Hellwig, vp, supply chain management Quaker Fabric 337 285 0 0 285 52 -13.9
Scott E. Shimizu, former executive vp, sales & marketing Pillowtex 334 334 0 0 334 0 -10.9
Nanci Freeman, president and ceo, Crown Crafts infant products Crown Crafts 328 233 95 0 328 0 52.6
Robert B. Dale, president, bed & bath WestPoint Stevens 327 300 27 0 327 0
Richard A. Grissinger, senior vp, marketing Pillowtex 286 286 0 0 286 0 4.0
Michael T. Gannaway, chairman and ceo Pillowtex 278 103 175 0 278 0
Anthony T. Williams, former president and coo Pillowtex 278 278 0 0 278 0 88.0

Vendor salaries
(straight salary, excluding bonus, other cash compensation and stock options)

Top Five
Holcombe T. Green, Jr., WestPointStevens $825,000
Larry A. Liebenow, QuakerFabric 660,000
Jeffrey S. Lorberbaum, Mohawk 635,000
Joseph L. Lanier, DanRiver 566,906
John L. Bakane, ConeMills 512,502
Bottom Five
Anthony T. Williams, Pillowtex 278,012
Marvin A. Woolen Jr., ConeMills 255,000
Nanci Freeman, CrownCrafts 233,000
Thomas Muzekari, QuakerFabric 227,000
Michael T. Gannaway, Pillowtex 103,077

Vendor Cash Bonuses
More textiles execs picked up a bonus last year, 12 vs. just five in 2001. In some cases, as at Mohawk, it was the result of strong performance. For others, like David Perdue, the here-today gone-tomorrow ceo at Pillowtex, and his more stalwart successor, Michael Gannaway, the cash came as a signing bonus.

David A. Perdue, Pillowtex $2,112,500
Jeffrey S. Lorberbaum, Mohawk 698,500
John L. Bakane, ConeMills 407,438
William B. Kilbride, Mohawk 244,330
E. Randall Chestnut, CrownCrafts 210,000
Joseph L. Lanier, DanRiver 205,763
Michael T. Gannaway, Pillowtex 175,000
Richard L. Williams, DanRiver 161,435
Marvin A. Woolen Jr., ConeMills 151,908
Nanci Freeman, Crown Crafts 95,000
Michael R. Harmon, Pillowtex 50,000
Robert B. Dale, WestPoint Stevens 27,390

Vendor Stock Options Exercised
Given the rock-bottom prices at which most home textiles stocks are selling these days, options clearly aren't what they used to be; or the incentive they were designed to be. Most executives found their options under water last year, as they had been the year before and the year before that — meaning it would have cost them more to exercise the option than to buy the stock on the open market, making the options worthless. The exceptions to the rule last year were Mohawk Industries and Quaker Fabrics, two of the industry's stronger performers, where executives were able to parlay their options into something worth having. While only four were able, or wanted, to exercise options, that still beats 2001, when only one could do it.

Thomas Muzekari, Quaker Fabric $468,454
M. Beatrice Spires, Quaker Fabric 401,897
William B. Kilbride, Mohawk 238,393
Mark Hellwig, QuakerFabric 51,520

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