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2000 CFO Pay: Steve Madden’s Dharia Nearly Doubled Compensation

Bonus, though, was cut in half.
Michelle GabrielleApril 27, 2001

Talk about a contrast in fate.

Last year, Steve Madden, Ltd.’s CFO Arvind Dharia took home $501,000 in total compensation, according to the company’s recently released proxy. This was nearly double what he took home during the prior year.

Meanwhile, the company’s founder and CEO, Steve Madden, was arrested on security fraud charges.

Dharia received $171,769 in salary, $80,000 in bonus, and $91,743 in other compensation from the Long Island City, N.Y.-based women’s shoe designer and retailer. He also exercised $157,488 in options.

In 1999, Dharria took home $140,000 in salary, $39,367 in bonus, and $88,606 in other compensation. Total Compensation: $267,973.

For both years, “other compensation” represented amounts paid by the company toward life insurance premiums.

Dharria joined Steve Madden in January 1998. The company agreed to pay him an annual salary of $140,000, subject to annual incremental increases of ten percent, commencing on the third anniversary of the four-year (plus one optional year extension) employment agreement.

According to the agreement, Dharia is also entitled to receive options to purchase 25,000 shares of the company’s common stock on June 30 of each year, with an exercise price equal to the closing bid price of the company’s common stock on June 30 of each year.

Steve Madden had his bonus halved to $400,000. His total compensation for 2000, excluding exercised options, came to $1,011,437, a whopping 27 percent lower than the $1,393,641 he took home in 1999.

In addition, he exercised 100,000 options for a net gain of $1,268,943.

President Phonda Brown also exercised 100,000 options for a realized net gain of $1,036,803.

According to a Reuters report, Madden was accused on June 20 by federal prosecutors and the SEC of allegedly helping to manipulate 22 initial public offerings, including his own firm’s 1993 IPO. Madden pleaded not guilty to stock fraud in U.S. federal court.

A day after he was arrested on securities fraud charges, Madden resigned as chairman and appointed Charles Koppelman as acting chairman but retained his CEO and director positions.

In 2000, Steve Madden Ltd. earned $16 million on revenue of $205.1 million, compared to $11.5 million on revenue of $163 million in 1999.

Shares of Steven Madden rose 58 cents, or 4 percent, to close at $14.93 on Nasdaq on Wednesday. In the past 52 weeks, they have been as low as $5.50 and as high as $22.69.