Despite drop in B&D stock, CEO got raise Price fell 16% in '96, but Archibald's pay rose to $5.22 million

More than twice '95

Boost is attributed to one-time benefit of $2.8 million

March 08, 1997|By Sean Somerville | Sean Somerville,SUN STAFF

Black & Decker Corp. more than doubled the pay of its chief executive officer last year -- a period when its stock price tumbled 16 percent.

Nolan D. Archibald, chairman and chief executive officer of the Towson-based maker of power tools and household appliances, was paid $5.22 million in 1996, compared to $2.57 million in 1995, according to the company's proxy statement filed with the Securities and Exchange Commission recently.

The compensation boosts Archibald, already one of the region's top paid executives, even higher in the rankings. Alex. Brown Inc.'s chairman and CEO A. B. "Buzzy" Krongard earned $7.7 million in 1995.

But most of last year's boost resulted from a one-time benefit pledged to Archibald a decade ago.

The Black & Decker chairman received about $2.8 million -- more than half his total -- to cover taxes resulting from his exercise of stock options. The company committed to cover that liability when Archibald was hired, in 1985. Black & Decker granted the options in 1986. Archibald's remaining options do not carry the same benefit.

"Back in the 1980s, it was common to grant cash appreciation rights," said Charles Fenton, senior vice president and general counsel for Black & Decker.

Archibald's salary increased 7 percent, from $838,942 to $900,000. His bonus jumped from $810,000 to $1.42 million.

That 75 percent bonus increase was made possible by an executive incentive plan approved last year by shareholders. The plan boosted the maximum bonus for executives from 90 percent of their annual salaries to 200 percent.

Fenton said Archibald's base salary had not been increased for several years. He also said the growth in the company's earnings per share and other improvements justified the bonus increase.

On a per-share basis, Black & Decker earned $2.41 last year, down 0.4 percent from $2.42 a share in 1995. But Fenton said that when the company excluded nonrecurring items for both years, earnings per share increased 15.4 percent, to $2.32 from $2.01.

In addition to his cash compensation, Archibald also received $1.39 million in stock from the company's long-term incentive plan, the result of the company achieving earnings-per-share targets that were set in 1993. In 1995, Archibald received about $1.13 million from the same program.

Archibald, 53, didn't receive any stock options last year, but has about 2.1 million options remaining, valued at about $25.4 million, according to the filing.

Bentley Offutt, an analyst with Hunt Valley-based Offutt Securities, said he had not studied Archibald's compensation package. But he said Black & Decker's compensation decisions take into account comparable positions elsewhere.

"These things typically have to be fair and I don't think they're normally out of line with the rest of the industry," he said.

Wall Street was a lot less generous last December 10, when the company said it wouldn't meet analysts' expectations in last year's fourth quarter and this year's first quarter because of sluggish growth in power tool sales. That news sent shares down $6 a share.

Black & Decker shares opened the year at $36 and closed as high as $43.25 in May. They ended the year $30.125.

Pub Date: 3/08/97

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