PSINet brass got big raises

Company now has $5 billion in losses, and a stadium sign

60% more for the CEO

`Obviously, it's not performance-based,' an analyst comments

April 21, 2001|By Andrew Ratner | Andrew Ratner,SUN STAFF

The top executives of PSINet Inc., the Northern Virginia-based Internet company on the verge of bankruptcy, received hefty pay increases last year.

William L. Schrader, chairman and chief executive officer, received a salary of $750,000 and a bonus of $450,000 last year, according to documents filed yesterday with the U.S. Securities and Exchange Commission. That was 60 percent more than in 1999, when his salary was $487,500 and his bonus was $262,000.

Other reported compensation included a $1,034 security system installed at Schrader's home in 1998, a $2,753 car allowance in 2000 and a $1,581 taxable trip in 1998.

The Ashburn, Va., company reported this week that it probably will have to file for Chapter 11 bankruptcy protection. It reported a net loss of $3.2 billion in the fourth quarter of 2000 and a net loss for the year of $5 billion, including $1.2 billion on discontinued businesses. That compared with a loss of $433.9 million in 1999.

"Obviously, it's not performance-based," said Gregory Gieber, an analyst at A. G. Edwards. "I'm sure the people who own the shares will not be appreciative."

The shareholders can't sell right now because the Nasdaq stock market halted trading April 3 at 19 cents a share. The company said this week that it was not certain that it could provide the information sought by Nasdaq to reactivate the stock.

PSINet's basic and diluted loss per share was $28.92 in 2000, compared with $3.49 in 1999.

The company in 1999 bought the right to have its name on the stadium in downtown Baltimore where the Ravens play football as part of a $105.5 million, 20-year marketing package.

Other executive compensation packages, according to yesterday's SEC filing, included:

Harry G. Hobbs, president and chief operating officer, $354,808 in salary and $360,000 in bonus, up from $258,751 in salary and $112,000 in bonus in 1999.

Kathleen B. Horne, executive vice president, general counsel and corporate secretary, $265,000 in salary and $125,000 in bonus, up from $247,615 in salary and $100,000 in bonus.

Lawrence E. Hyatt, executive vice president and chief financial office, $168,269 in salary and $150,000 in bonus.

Several of the top executives who received large raises and bonuses resigned last fall from the company, which connects businesses to the Internet and operates Web-hosting centers around the world.

Harold S. Wills, former president and chief operating officer, received $630,000 in salary and a $200,000 bonus in 2000. He was paid $468,750 in salary and a $212,500 bonus in 1999. He resigned in November.

David N. Kunkel, former vice chairman and executive vice president, was paid $486,505 in 2000, up from $350,000 in 1999. His bonus for 2000 was $150,000, the same as in 1999 and 1998. He resigned in September.

James F. Cragg, former executive vice president and president of North American operations, received $328,846 in salary and $455,250 in bonus, up from $89,308 in salary and $110,000 in bonus in 1999. Craig joined the company in July 1999 and resigned last month.

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