Bonuses reduced for Price's top brass

Their base salaries remain at $300,000

March 05, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

T. Rowe Price Group Inc.'s fortunes fell in 2001, and as a consequence so did the bonuses of the firm's top executives, according to a proxy statement filed with the Securities and Exchange Commission yesterday.

George A. Roche, T. Rowe's chairman and president, saw his bonus decline 32 percent last year, to $1.7 million from $2.5 million in 2000. In addition, Roche was not awarded any stock options; he received 50,000 options the year before.

His base salary remained unchanged at $300,000.

Vice Chairmen James S. Riepe and M. David Testa also received bonuses of $1.7 million each, down from $2.5 million, according to the proxy. They also had unchanged base salaries of $300,000 and received no options.

The Baltimore-based mutual fund company's profit fell 27.2 percent last year to $195.9 million, or $1.52 per share, compared with $269 million, or $2.08 per share, in 2000. Revenue fell 15.2 percent to $1 billion, compared with $1.2 billion the previous year.

It was the first time in a decade that Price's profit for a full year was less than the previous year. The firm laid off 235 employees to cut costs.

Price's stock fell 18 percent in 2001, ending the year at $34.73. It closed at $41.41 yesterday, up $1.03.

"It's fairly typical, not just with asset managers but across the entire industry," said Rachel Barnard, a stock analyst at Morningstar Inc. who covers Price. "T. Rowe had a challenging year last year and they cut quite a few people."

Managing director James A.C. Kennedy's $300,000 base salary remained unchanged but his bonus fell 20 percent to $1.6 million and he was granted 80,000 stock options. William T. Reynolds, also a managing director, saw his bonus fall 15 percent to $1.4 million and he was given 60,000 options. His base salary remained $300,000.

Executives at Price were not the only ones to see a cut in take-home pay. Lehman Brothers Holdings Inc. chopped Chairman and Chief Executive Officer Richard Fuld's pay by 43 percent last year, to $16 million. Goldman Sachs Group Inc. cut Chairman and CEO Henry Paulson's compensation 15 percent to $18.9 million, and Morgan Stanley Dean Witter & Co. whacked CEO Philip Purcell's pay about 40 percent, to $16.1 million.

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