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Vendors Score Big Gain in Options

In another hit-and-miss, persistently trying year for U.S. public textiles companies, it was a feast-or-famine year for the skippers of those companies as well, some taking home more money, and others taking home considerably less.

Because of the musical-chairs nature of the business these days, with so many players wandering on or off the stage, an apples-to-apples comparison with last year is especially tricky: Only eight of the 12 players in this year's ranking were on board last year. But taking a look at those eight who survived from one year to the next, five got raises, while three took a hair cut.

As in past years, stock options had a lot to do with it.

Just how much? Consider this. In 2005, those 12 executives took home a combined total of $12.6 million in pay, more than twice the size of the whole group's paycheck of just $4.9 million during 2004. The entire difference can be accounted for by the $7.5 million in stock options exercised last year by Mohawk ceo Jeffrey S. Lorberbaum. But pull his options out of the equation, and the entire executive cadre's compensation edged up just 3.7%, barely more than the norm achieved by the average American worker.

Other big gainers last year were Thomas M. Duff, the ceo of Wellman, whose remuneration jumped by 54.5%, to $1.0 million; and E. Randall Chestnut, the turnaround architect at Crown Crafts, whose compensation package jumped up by 42.0%, to $561,000. In Chestnut's case, the difference was a performance bonus of $166,000, up from zero the year before.

VENDORS 3-YEAR SALARY VS. EARNINGS COMPARISON

Name Company Tot. Comp Change Sales Income
James L. Schaeffer Polymer Group 50.4% 22.0%
Keith R. Phillips Wellman 47.9 24.1
Thomas M. Duff Wellman 45.0 24.1
Rolf J. Altdorf Polymer Group 17.4 22.0
Jeffrey S. Lorberbaum Mohawk 17.3 32.4 15.5%
W. Christopher Wellborn Mohawk 16.6 32.4 15.5
Nanci Freeman Crown Crafts 6.1 -15.8 154.7
Franklin N. Saxon Culp 5.5 -17.9
Larry A. Liebenow Quaker Fabric -4.2 -30.9
M. Beatrice Spires Quaker Fabric -4.2 -30.9
E. Randall Chestnut Crown Crafts -4.8 -15.8 154.7
Robert G. Culp, III Culp -45.9 -17.9


EXECUTIVE COMPENSATION VENDORS
dollar amounts in thousands

Name, Title Company Total cash, stock options exercised Salary 2005 Bonus 2005 Total cash compensation Value of stock options exercised Total cash comp. 3-yr. % change 2003-2005
1. Fiscal year ended April 2006.
Jeffrey S. Lorberbaum, chairman, president and ceo Mohawk $8,876 $825 $557 $1,382 $7,494 17.3%
James L. Schaeffer, ceo Polymer Group 1,166 575 590 1,166 0 50.4
Thomas M. Duff, chairman and ceo Wellman 1,001 720 281 1,001 0 45.0
W. Christopher Wellborn, coo Mohawk 857 516 341 857 0 16.6
Larry A. Liebenow, president and ceo Quaker Fabric 645 645 0 645 0 -4.2
E. Randall Chestnut, chairman, president and ceo Crown Crafts 561 395 166 561 0 -4.8
Rolf J. Altdorf, vp and managing director of Europe Polymer Group 467 348 119 467 0 17.4
Robert G. Culp, III, chairman & ceo 1 Culp 449 416 0 416 33 -45.9
Keith R. Phillips, vp, cfo Wellman 417 321 96 417 0 47.9
Nanci Freeman, president and ceo, Crown Crafts infant products Crown Crafts 365 261 104 365 0 6.1
Franklin N. Saxon, president and coo 1 Culp 364 300 50 350 14 5.5
M. Beatrice Spires, vp - design and merchandising Quaker Fabric 313 313 0 313 0 -4.2


VENDOR SALARIES
Top and bottom 5 vendors by 2005 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
Larry A. Liebenow, Quaker Fabric 644,900
James L. Schaeffer, Polymer Group 575,385
W. Christopher Wellborn, Mohawk 515,968
Bottom Five
Rolf J. Altdorf, Polymer Group $347,698
Keith R. Phillips, Wellman 321,077
M. Beatrice Spires, Quaker Fabric 312,700
Franklin N. Saxon, Culp 300,000
Nanci Freeman, Crown Crafts 261,000


VENDOR CASH BONUSES
Top and bottom vendors by 2005 bonus

As the U.S. home textiles industry continues to shift, bonuses proved to be just as elusive as earnings: in some cases smaller, in others non-existent. Of the 12 vendor execs included in this year's compensation survey, only seven, slightly more than half, earned a bonus at all. And three of those cashed a significantly smaller check: Mohawk chief Jeffrey Lorberbaum's bonus was cut by 26%, or $163,000, to $556,875; Culp chief Robert Culp's bonus went to zero from $354,000; and Culp's Franklin Saxon had his bonus cut by almost half, to $50,000 from $99,000. On the other hand, Crown Craft's E. Randall Chestnut earned his $166,000 bonus, up from zero the year before, after leading the company back to profitability.
Top Five
James L. Schaeffer, Polymer Group $590,127
Jeffrey S. Lorberbaum, Mohawk 556,875
W. Christopher Wellborn, Mohawk 341,250
Thomas M. Duff, Wellman 280,800
E. Randall Chestnut, Crown Crafts 166,000
Bottom Five
Keith R. Phillips, Wellman $96,323
Franklin N. Saxon, Culp 50,000
M. Beatrice Spires, Quaker Fabric 0
Larry A. Liebenow, Quaker Fabric 0
Robert G. Culp, III, Culp 0


VENDOR STOCK OPTIONS EXERCISED
2005 stock options exercised

With little remaining of a once vibrant array of public companies in the home fashions business, and with stock prices largely beaten down to near-penny stock levels (with the notable exception of Mohawk Industries), stock options hold little allure as a reward for performance. Stock prices for many are so depressed, in fact, that it would cost more to buy the stock than it is actually worth. That said, it was worth it last year for three execs at two companies, Mohawk and Culp. Mohawk ceo Jeffrey Lorberbaum took home $7.5 million. And after Culp's stock price jumped up almost 60% last year, Robert G. Culp III cashed in options worth $32,760, and Franklin N. Saxon, president and coo, took home $13,650.
Top Three
Jeffrey S. Lorberbaum, Mohawk $7,494,112
Robert G. Culp, III, Culp 32,760
Franklin N. Saxon, Culp 13,650


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