Westinghouse chief predicts profit in '92

April 30, 1992|By Ted Shelsby | Ted Shelsby,Staff Writer

PITTSBURGH -- Westinghouse Electric Corp. Chairman Paul E. Lego predicted yesterday that the company would return to the black this year and faced shareholder charges that he profited while presiding over one of the toughest financial periods in the company's history.

Addressing shareholders at Westinghouse's annual meeting, Mr. Lego said there were no plans for additional layoffs.

That issue is of particular interest to the company's approximately 12,000 Electronic Systems Group employees in Maryland. Westinghouse's Maryland work force felt the brunt of the company's decision last year to eliminate 4,000 jobs. Approximately 2,500 of the cuts were at operations in Hunt Valley and Linthicum.

Mr. Lego also said Westinghouse had considered selling its broadcasting division, which includes WJZ-TV, Channel 13 in Baltimore, but those plans have been canceled "at this time."

He evidently expected investor criticism of a stock option incentive plan that could offset a cut of more than $1 million in cash compensation last year as a result of the company's poor performance.

Westinghouse posted a loss of $1.1 billion last year, in contrast to a $268 million profit the previous year.

One of the biggest rounds of applause came when Mr. Lego told the gathering of 800 shareholders -- double the typical attendance at one of the company's annual meetings -- about a letter he had received from a shareholder in Illinois who said that he and the board should resign or be fired.

A stockholder who identified himself as a former Westinghouse employee who had worked for the company for nearly 30 years, suggested that Mr. Lego cut his salary to correspond to the level of his "very poor" performance.

The shareholder called on Mr. Lego to accept a $1 annual salary based on the company's poor performance last year. "Will you accept it?" the shareholder shouted.

When Mr. Lego declined, the investor retaliated: "Turn it [the company] around, Paul, and then take your money."

Mr. Lego was awarded stock options in April and December 1991 amounting to 700,000 shares. Mr. Lego has not exercised them, a company spokesman said.

Westinghouse shares closed yesterday at $18.625, up 25 cents, on the New York Stock Exchange.

Richard R. Pivirotto, an outside director and head of the executive compensation committee, told shareholders that stock option plans are fair and described them as a major incentive to have Mr. Lego and other executives increase the shareholder value of the company.

Regarding his prediction of the company's return to profitability this year, Mr. Lego said at a news conference before the meeting that his earlier forecasts have been wrong.

"We should be profitable in '92," he said, "but that depends on an awful lot of factors. One is the economy, which I have no control over."

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