Kmart CFO Martin E. Welch III was awarded $598,500 in restricted stock last year, helping to boost his total pay package to $1,168,125 for 2000, up 57% from the prior year, according to the company’s recently released proxy.
Last year, Kmart reported a $45 million operating loss and $332 million pretax loss on $37 billion in revenue, compared to a $1.3 billion operating profit on nearly $36 billion of revenue in 1999. According to a Kmart spokesperson, “the loss reflected strategic actions taken in the second quarter that led to a charge of $463 million after tax to enhance the productivity of the company’s store-base, inventory, and information system.”
Welch received a salary of $430,425, a bonus of 100,000, and $39,200 in other compensation, in 2000.
In 1999, Welch took home $412,700 in salary, $206,449 in bonus, and $32,407 in other compensation.
However, in 2000 Welch was awarded $598,500 in restricted stock versus “just” $56,993 of restricted stock in 1999. As a result, his 1999 total compensation came to 708,549.
Welch first stepped through the Kmart doors in 1995 as SVP and CFO. He was promoted to EVP and CFO last year. Prior to that, he was CFO at Federal Mogul Corp., a Southfield, Mich.-based auto component maker.
In an attempt to improve sales, Kmart has brought back its “Blue Light Special,” which gives its shoppers 20 minutes to buy some of Kmart’s select top-brand products at discount prices. The “Blue Light Special” has been out of the wood-works for over 10 years. This time it will also be available online.
Shares of Kmart, which have outperformed the Standard & Poor’s index of mass merchandisers by about 18 percent in the last 52 weeks, closed at $9.18 on Thursday.
A Much Smaller Jackpot
In 2000, Park Place Entertainment paid LaPorta $450,000 in salary, $411,975 in bonus, and $52,607 in other compensation. Total Compensation: $914,582.
The year before, LaPorta received $451,739 in salary and $48,453 in other compensation, about what it came out to in 2000. However, on top of that he received a $775,000 bonus, or more than double his 2000 bonus, bringing his total compensation to $1,275,192.
For both years, “other compensation” included matching contributions made by the company under its executive deferred compensation plan and 401(k) plan, as well as the premium paid by the company for disability and life insurance premiums.
LaPorta, who has been with the gaming company since its inception, has still advanced his career. Since January 31, 2001, along with his CFO responsibilities, LaPorta is now responsible for supervising the analysis, structuring and execution of all corporate development and acquisition activities.
In 2000, Park Place’s revenue soared by 53 percent to $4.9 billion from $3.2 billion in 1999 while earned rose 5.1 percent to $143 million. In addition, in 2000, the company increased occupancy by approximately two percent, which led to a 12 percent increase in hotel revenues.
For the year, the company generated $615 million in excess cash flow, putting $233 million toward new growth projects, $226 million toward debt payment, and $156 million for the repurchase of $12.8 million shares of stock.