Vendors Maintain Pay in Uncertain Climate

James Mammarella, October 29, 2007

New York —Pity the poor manufacturer… but don't spare too much pity for the manufacturing executives.

While publicly held vendor companies in the U.S. home textiles industry suffered a range of setbacks and dislocations during 2006 – Crown Crafts thrashed through a painful restructuring, Mohawk shares lost 5% of their value, polyester maker Wellman's shares lost 50%, and Quaker Fabric edged toward bankruptcy and liquidation — the top executives at these companies had ample take-home pay.

In fact, 10 of the vendor execs in this year's report earned more than a half-million dollars in total cash compensation — while only six had reached that level in 2005.

Three Mohawk bigs took home more than $1 million: ceo Jeffrey Lorberbaum, coo Christopher Wellborn, and Unilin division president Frans De Cock.The Mohawk execs' personal success varied when compared to the fortunes of the company over the past three years. While Mohawk, on the acquisition trail, saw sales climb 34.4% and income grow 23.7% during that time frame, the change in total compensation of top execs ranged from the 102.8% gain of Wellborn — who easily led all vendor increases for the period — to the seemingly more modest gain of 11.0% for Lorberbaum. However, ceo Lorberbaum's compensation was of rather heroic stature to begin with.

Crown Crafts executives, by contrast, saw their compensation rise over three years by 62.7% (chairman, president and ceo E. Randall Chestnut) and 36.7% (infant products division president and ceo Nanci Freeman) — while the company's income zoomed 211.8% in the throes of a business turnaround, one that saw sales fall 14.2% over the period.

Downward pressure on vendor companies in 2006 was evident only in the lower ranks of the salary portion of compensation. While the top five salary earnings were roughly equivalent year-to-year, the bottom five saw an aggregate 36% cut in salary, to a group total of $993,000 from $1.54 million a year ago.

Conversely, both bonuses and the value of stock options exercised increased, on average, for everyone at the top and bottom — with the exception of Mohawk's Lorberbaum, absent from this year's options top five, but who took home his options windfall, to the tune of $7.5 million, the year before.


Name Company Tot. Comp Change Sales Income
W. Christopher Wellborn Mohawk 102.8% 34.4% 23.7%
E. Randall Chestnut Crown Crafts 62.7 -14.2 211.8
Nanci Freeman Crown Crafts 36.7 -14.2 211.8
Robert G. Culp, III Culp 24.0 -12.6 -92.6
Keith R. Phillips Wellman 22.4 2.1 120.0
H. Monte Thornton Mohawk 17.8 34.4 23.7
Joseph C. Tucker Wellman 16.7 2.1 120.0
Thomas M. Duff Wellman 11.1 2.1 120.0
Jeffrey S. Lorberbaum Mohawk 11.0 34.4 23.7
Thomas Muzekari Quaker Fabric -5.5 -47.5 1742.9
Larry A. Liebenow Quaker Fabric -5.5 -47.5 1742.9
M. Beatrice Spires Quaker Fabric -5.5 -47.5 1742.9
James L. Schaeffer Polymer Group -46.3 20.9 4040.5
Franklin N. Saxon Culp -80.0 -12.6 -92.6

dollar amounts in thousands

Name, Title Company Total cash, stock options exercised Salary 2006 Bonus 2006 Total cash compensation Value of stock options exercised Total cash comp. 3-yr. % change 2004-2006
1. Effective May 1, 2007, Saxon became president and ceo.
2. Served as chairman and ceo until April 30, 2007; effective May 1, 2007, Culp serves only as chairman
3. Filed Chapter 11 bankruptcy on Aug. 16, 2007.
Jeffrey S. Lorberbaum, ceo Mohawk $1,638 $825 $813 $1,638 $0 11.0%
W. Christopher Wellborn, coo Mohawk 1,580 709 871 1,580 0 102.8
H. Monte Thornton, president - flooring Mohawk 1,080 489 408 896 183 17.8
Frans G. De Cock, president - Unilin Mohawk 1,044 564 480 1,044 0
Thomas M. Duff, chairman and ceo Wellman 720 720 0 720 0 11.1
Larry A. Liebenow, president and ceo Quaker Fabric 3 645 645 0 645 0 -5.5
E. Randall Chestnut, chairman, president and ceo Crown Crafts 643 400 243 643 0 62.7
Franklin N. Saxon 1, president and coo Culp 641 300 300 600 41 -80.0
Robert G. Culp, III 2, chairman and ceo Culp 621 416 100 516 105 24.0
James L. Schaeffer, former ceo Polymer Group 538 538 0 538 0 -46.3
Nanci Freeman, president and ceo, Crown Crafts infant products Crown Crafts 365 261 104 365 0 36.7
M. Beatrice Spires, vp - design and merchandising Quaker Fabric 3 348 313 0 313 36 -5.5
Keith R. Phillips, vp and cfo Wellman 336 336 0 336 0 22.4
Willis C. Moore, III, vp and cfo Polymer Group 319 319 0 319 0
Michael E. Dewsbury, vp - PET resins division U.S. Wellman 310 310 0 310 0
Amy V. Samson, vp and cfo Crown Crafts 305 215 90 305 0
Fernando Espinosa, vp and general manager Polymer Group Latin America & Asia 276 276 0 276 0
Joseph C. Tucker, vp, fiber and recycled products group Wellman 270 270 0 270 0 16.7
Michael W. Hale, vp and general manager, U.S. Nonwovens & Europe Polymer Group 261 261 0 261 0
Robert G. Culp, IV, president - Culp Home Fashions division Culp 261 175 83 258 2
Thomas Muzekari, vp - sales Quaker Fabric 3 250 222 0 222 28 -5.5
Duncan Whitehead, vp - research and development Quaker Fabric 3 235 235 0 235 0
Debra Dunne, vp - design, Crown Crafts infant products Crown Crafts 191 147 44 191 0

Top and bottom 5 vendors by 2006 salary*

* straight salary, excluding bonus, other cash compensation and stock options
Top Five
Jeffrey S. Lorberbaum, Mohawk $825,000
Thomas M. Duff, Wellman 720,000
W. Christopher Wellborn, Mohawk 709,032
Larry A. Liebenow, Quaker Fabric 644,900
Frans G. De Cock, Mohawk 564,375
Bottom Five
Duncan Whitehead, Quaker Fabric $234,500
Thomas Muzekari, Quaker Fabric 221,800
Amy V. Samson, Crown Crafts 215,477
Robert G. Culp, IV, Culp 175,000
Debra Dunne, Crown Crafts 146,916

Top and bottom 5 vendors by 2006 bonus

Compared to the year prior, home textiles manufacturing executives scored far better in the bonus department in 2006. That was evident in the totals at both the top and bottom ends of the scale. Clearly the runaway favorite place of employment in terms of bonus potential was Mohawk, landing all of the top four spots. The total combined bonuses of coo Wellborn, ceo Lorberbaum, and division presidents De Cock (Unilin) and Thornton (flooring) amounted to $2.57 million. The year before, the sum of the top four vendor bonuses was $1.77 million.
Top Five
W. Christopher Wellborn, Mohawk $870,826
Jeffrey S. Lorberbaum, Mohawk 812,644
Frans G. De Cock, Mohawk 479,715
H. Monte Thornton, Mohawk 407,572
Franklin N. Saxon, Culp 300,000
Bottom Five
Nanci Freeman, Crown Crafts $104,270
Robert G. Culp, III, Culp 100,000
Amy V. Samson, Crown Crafts 90,000
Robert G. Culp, IV, Culp 83,475
Debra Dunne, Crown Crafts 44,310

2006 stock options exercised

The wind has gone out of stock options for the handful of publicly held U.S. companies still active in home textiles. Still, Monte Thornton, president of the flooring division at Mohawk, took home a six-figure cash-in, as did Culp chairman and ceo Robert Culp III, while his colleague Franklin Saxon, president and coo at Culp, managed to cash in $40,500 worth. Two Quaker Fabric execs, vp design and merchandising Beatrice Spires and vp sales Thomas Muzekari, managed to cash in five-figure option amounts — no doubt to the envy of shareholders who later (August 2007) watched Quaker tumble into bankruptcy and liquidation.
Top five
H. Monte Thornton, Mohawk $183,465
Robert G. Culp, III, Culp 104,500
Franklin N. Saxon, Culp 40,500
M. Beatrice Spires, Quaker Fabric 35,629
Thomas Muzekari, Quaker Fabric 28,322

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