Industry executives get squeezed
September 24, 2001,
New York — In a bruising year for the American textiles business, with profits and share prices falling through the floor, there was plenty of pain to go around, especially in the executive suite, where more than half of the industry's top managers had their pay cut and two-thirds had their bonus shredded.
Not to mention executives' long-term incentive plans. That top-tier perk is pegged to a company's performance, and given the industry's flame-out last year, not a single nickel was paid.
And the top managers at rock-solid Mohawk Industries, retiring chairman and ceo David Kolb and new ceo Jeffrey Lorberbaum, came in place and show last year, with pay packages of $1.4 million and $828,000, respectively.
But losers outnumbered winners, by a margin of nine to seven, as executives shared the pain with shareholders and investors.
Hardest hit was Tom Ward, ousted ceo of WestPoint Stevens. Not only did he lose his job, but his total take was slashed by 74.5 percent, to $510,000 from $2 million the year before, when he took home a $500,000 salary, a $600,000 bonus, plus $900,000 he made exercising stock options. No bonus, no options, quashed his total take last year.
Acknowledging that the buck stops at her desk, Springs chairman and ceo Crandall Bowles cut her own pay by 35.4 percent, to $638,000 from $988,000 the year before — a hit of $350,000. And the entire cadre of Springs' top managers shared the pain with Bowles. Steve Kelbley, former executive vp, took a 24.4 percent pay cut; and Tom O'Connor, executive vp, had his payout slashed by 21.1 percent.
Particularly hard hit last year were management bonuses. Two-thirds of the ranking for whom two-year figures were available for comparative purposes, 10 out of 15, had their bonus whittled down vs. five who saw it increased.
Notable among the hits was the one taken by WestPoint's Greene, whose bonus fell to zero from $858,000 the prior year. And he wasn't alone: Also going to zero from a cash payout the year before were four others: Tom Ward at WestPoint; Crandall Bowles at Springs; Abe Stenberg, former Burlington vice chairman and head of Burlington House; and George Henderson III, Burlington ceo.
And forget stock options. With the share price of most companies still dragging along the cellar floor, all those options were 'under water' for most textiles execs — they would have to pay more for the stock than it's worth.
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