BGE paid $215,000 in '95 bonuses Executives rewarded for executing merger

March 16, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Baltimore Gas and Electric Co.'s senior executives received $215,000 in bonuses last year for executing its pending merger with the Potomac Electric Power Co., a corporate marriage that will result in the elimination of more than 1,300 positions.

BGE Chairman and Chief Executive Christian H. Poindexter received the largest merger-related bonus of $100,000, according to a proxy statement filed yesterday with the U.S. Securities and Exchange Commission.

BGE President and Chief Operating Officer Edward A. Crooke and Vice President of Finance and Chief Financial Officer Charles W. Shivery were awarded $75,000 and $40,000, respectively, in bonuses for their part in the $2.9 billion Pepco merger.

"It's just more stockholder money going into the coffers of people already making tremendous salaries," said Gary Heald, a representative of the International Brotherhood of Electrical Workers, the labor union that represents many Pepco workers and also is working to organize BGE employees. "It's just corporate greed."

BGE and Pepco expect their merger to save $1.3 billion through 2007, mostly through the reduction of 10 percent of its combined work force, or 1,325 positions. BGE and Pepco project severance packages for those employees will total $51.5 million.

But utility analysts said the bonus figures were not at all out of line.

"Relative to other utility mergers and especially bonuses outside the utility industry, the amounts are really insignificant," said Ronald S. Tanner, an analyst with Legg Mason Wood Walker Inc. in Baltimore.

In all, Mr. Poindexter's total compensation of $816,244 rose 18.6 percent from 1994, Mr. Crooke's $609,984 by 15.2 percent and Mr. Shivery's $310,536 by 29.2 percent.

Without the merger bonus, however, the chief executive's pay would have been up just 4.1 percent, the president's by 2 percent and the chief finan- cial officer's by 12.6 percent.

By comparison, BGE's earnings rose 4.6 percent in 1995, to $297 million.

BGE noted in the proxy statement that raises in executive compensation were based on comparisons with other like-sized power concerns, its response to "changes in the industry and regulatory environment" and the company's 1994 performance, a year in which BGE's earnings from operations increased 8.1 percent.

Pub Date: 3/16/96

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