B&D trims CEO's pay 40%

Board takes action after toolmaker's profit, stock fall

March 13, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

Black & Decker Corp.'s board cut its chief executive's pay by nearly 40 percent last year after the toolmaker's profit and stock price declined, according to a proxy statement filed yesterday.

Nolan D. Archibald, the Towson-based firm's chairman, president and chief executive, earned $2.3 million last year, down from $3.8 million the year before.

His compensation included a salary of $1.2 million, which was up 9 percent, and a bonus of $850,000, a decline of 32 percent. In 2000, Archibald received a long-term incentive plan payment of nearly $1.2 million, but nothing last year.

Archibald's miscellaneous other compensation was about $239,000, which included use of the company airplane and reimbursement for financial counseling fees.

"Black & Decker's earnings were [down], so I would expect pay to fall," said analyst Barry B. Bannister, who follows the company for Legg Mason in Baltimore. "But a lot of that is the cyclical effect on the company and not so much management's failure."

The toolmaker reported its first quarterly loss in four years in the final three months of 2001, losing $13 million, or 16 cents a share, on sales of $1.2 billion. That loss included a charge of $100 million related to the company's planned layoff of about 2,000 workers as production jobs are moved to countries with cheaper labor.

For the year, Black & Decker's sales were down 5 percent, to $4.3 billion, and net earnings dropped 61 percent, to $108 million.

Its stock price began last year at $39.25 but ended at $37.73, a drop of about 4 percent.

Although it does not count as part of his 2001 compensation package, Archibald exercised 750,000 options last year that were granted in 1991, according to the proxy. He sold them for a net gain of $21.4 million before taxes.

He also sold 180,000 shares this month - for a net of about $4.8 million - from options granted a decade ago that were set to expire in June.

The 200,000 options Archibald was granted last year will be worth about $3.8 million in 10 years if the stock price goes up 5 percent a year, the proxy said, and would be worth just over $9.5 million with a 10 percent annual gain.

Paul F. McBride, executive vice president of power tools and accessories, also had his compensation cut last year. He earned about $926,000 and received 100,000 options in 2001, compared with a salary of about $1.5 million and 200,000 options in 2000.

Charles E. Fenton, senior vice president and general counsel, earned $621,000 - down 42 percent - and received 30,000 options vs. the 150,000 granted in 2000.

Michael D. Mangan, senior vice president and chief financial officer, earned $597,000, a decline of 26 percent. He received 30,000 options instead of the 125,000 he was granted the year before.

Paul A. Gustafson, executive vice president for fastening and assembly systems, made $628,000, which was down 34 percent. He was given 35,000 options vs. 175,000 in 2000.

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