Many vendors take wage cuts

Don Hogsett, November 4, 2002

Proving the point that "the buck stops here" at the boss' desk, senior execs in the American home textiles industry mostly had their paychecks shredded once again last year. They took responsibility, and felt it where it hurts the most, as sales, profits and stock prices tumbled under intense competition; mounting pressure from imports, brass-knuckle tactics from their retail partners, and a wilting environment for retail sales.

Indeed, almost twice as many senior execs took pay cuts as got raises in 2001 — seven losing ground, and only four advancing. One was unchanged.

Comparisons between the two years are tricky since it was a year of changing faces in the Home Textiles Today 2001 Executive Compensation Report, as companies went private, like Springs, or played musical chairs in the executive suite, like WestPoint Stevens and Pillowtex. In last year's report, compensation was reported for 22 senior execs; this year it's down to 18; and only 12 of those names show up on both year's lists.

The striking commonality between the years, however, is that the fortunes of the skippers reflected the trajectory of the companies they led. If the company did well, so did the bosses, and vice versa. And compensation notably tracked a company's stock price, since so much of compensation today is locked up in stock options.

A case in point is Holcombe Green Jr., chairman and ceo of WestPoint Stevens. As the company's stock price continued its long slide, so did Green's take-home pay — it was slashed last year by almost two-thirds, falling by 62.4 percent, to $899,000 from $2.4 million in 2000, as the value of his stock options evaporated.

Not all the paychecks grew smaller, though, and as individual companies prospered, like rapidly growing Mohawk, so did its execs, who took over last year as the most highly compensated execs in the entire home textiles industry. Exercising stock options to take home even more money than his boss, Bill Kilbride, president of Mohawk Home, doubled his pay and led the entire industry in 2001, pulling down $1.5 million between salary, bonus and stock options. Boss Jeffrey Lorberbaum, president and ceo of Mohawk Industries, pulled down $1.1 million between salary and bonus but exercised no stock options.

Another big winner in 2001 was Randall Chestnut, who took over as ceo of Crown Crafts after earlier building the company's big infant's products business. Chestnut more than doubled his compensation package, to $777,000 from $300,000 the prior year, as he added a $445,000 cash bonus to his salary of $332,000. Chestnut beat out his former boss, Michael Bernstein, who now heads up bedding producer Design Works. He took home $368,000 last year.

Home Textiles Today's Executive Compensation Report: vendors
dollar amounts in thousands

Name, Title Company Total cash, stock options exercised Salary 2001 Bonus 2001 Long-term incentive plan Total cash compensation Value of stock options exercised Total cash comp. 3-yr. % chg. 1999-2001
William B. Kilbride, president, Mohawk Home Mohawk Industries $1,524 $320 $240 $0 $560 $964 16.4%
Jeffrey S. Lorberbaum, president and ceo Mohawk Industries 1,078 575 503 0 1,078 0 20.1
Holcombe T. Green Jr., chairman and ceo WestPoint Stevens 899 899 0 0 899 0 -42.8
E. Randall Chestnut, chairman, president and ceo Crown Crafts 777 332 445 0 777 0 159.0
Larry A. Liebenow, president and ceo Quaker Fabric 640 640 0 0 640 0 6.7
David E. Polley, president, residential division Mohawk Industries 564 323 242 0 564 0 10.9
Joseph L. Lanier, chairman and ceo Dan River 552 552 0 0 552 0 -9.3
John L. Bakane, president and ceo Cone Mills 500 500 0 0 500 0 17.6
M. L. "Chip" Fontenot, president and coo WestPoint Stevens 443 443 0 0 443 0
Richard L. Williams, president and coo Dan River 433 433 0 0 433 0 -9.3
Anthony T. Williams, president and coo Pillowtex 400 400 0 0 400 0
Scott E. Shimizu, executive vp, sales & marketing Pillowtex 375 375 0 0 375 0 0.0
Michael H. Bernstein, president and ceo Crown Crafts 368 121 247 0 368 0 12.2
M. Beatrice Spires, vp, styling and design Quaker Fabric 295 295 0 0 295 0 29.3
Joan E. Amberg, senior vp, bed division WestPoint Stevens 285 285 0 0 285 0 -9.2
Richard A. Grissinger, senior vp, marketing Pillowtex 284 284 0 0 284 0 3.3
Mark Hellwig, vp, supply chain management Quaker Fabric 256 256 0 0 256 0 -7.2
Anthony Degomes, vp, new business development Quaker Fabric 226 226 0 0 226 0 0.0

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

Top five
Holcombe T. Green Jr., WestPoint Stevens $899,000
Larry A. Liebenow, Quaker Fabric $640,000
Jeffrey S. Lorberbaum, Mohawk Industries $575,000
Joseph L. Lanier Jr., Dan River $552,000
John L. Bakane, Cone Mills $500,000
Bottom five
Joan E. Amberg, WestPoint Stevens $285,000
Richard A. Grissinger, Pillowtex $284,000
Mark Hellwig, Quaker Fabric $256,000
Anthony Degomes, Quaker Fabric $226,000
Michael H. Bernstein, Crown Crafts $121,000

Vendor cash bonuses

In a year of weak earnings, if any at all, for public home textiles companies, these are the only five senior executives in this year's ranking to receive a cash bonus.
Jeffrey S. Lorberbaum, Mohawk Industries $503,000
E. Randall Chestnut, Crown Crafts $445,000
Michael H. Bernstein, Crown Crafts $247,000
David E. Polley, Mohawk Industries $242,000
William B. Kilbride, Mohawk Home $240,000

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