Bonus surges for Black & Decker's boss

With salary, Archibald gets total of $4.33 million

March 12, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Black & Decker Corp.'s higher earnings in 2002 translated into a $2.75 million bonus for the company's top executive - more than three times the one he received in 2001, according to proxy statement filed yesterday.

In total, Nolan D. Archibald, Black & Decker's chairman, president and chief executive officer, was paid $4.33 million last year - nearly double his 2001 earnings of $2.29 million. He also exercised 360,000 options awarded in previous years for a gain of $9.5 million - a figure that isn't counted as part of his compensation package.

Archibald received a $1.27 million base salary last year, 6 percent higher than 2001. He also received $304,292 in miscellaneous compensation, which included use of a company airplane, reimbursement for financial counseling fees, retirement savings plan contributions and life insurance premiums.

As part of his compensation package, Archibald was also granted 225,000 stock options that would be worth $6.8 million in April 2012 if the stock price goes up 5 percent a year, the proxy filed with the Securities and Exchange Commission said, and $17.3 million based on a 10 percent annual gain.

The bonuses for Archibald, 59, and other top executives were based entirely upon Black & Decker's earnings-per-share performance last year, and ranged from 90 percent to 200 percent of base salary, according to the filing. Archibald's bonus was calculated on a doubling of his current annual salary, which was raised to $1.38 million a year in October, the filing said.

Earnings at the world's largest toolmaker improved last year after the company embarked on a broad restructuring program to cut costs, trim capital spending, reduce jobs and move production to countries with cheaper labor.

It closed three U.S. plants and plans to shut its Eastern Shore plant - with a loss of 1,300 jobs - by year's end. Production is being shifted to such countries as Mexico and the Czech Republic.

For 2002, Black and Decker reported net earnings of $229.7 million, or $2.84 per diluted share, more than double the $108 million, or $1.33 per share, it earned in 2001. Sales rose 3 percent to $4.39 billion.

Black & Decker expects the bill for its restructuring program to be $170 million, but says it should generate $100 million in annual savings by next year. The program generated net savings of about $25 million last year, the company has stated.

"I think the good news for stockholders is that compensation does move around," said spokeswoman Barbara B. Lucas. "Bonuses do reflect corporate performance and do vary in terms of whether we meet the target that we set at the beginning of each year."

Last year "was a very good year for them," said Larry Horan, research director for Parker/Hunter Inc. of Pittsburgh, who holds Black & Decker shares.

"That's what dictated [Archibald's] bonus. This year, the first half is going to be tough. You've got an economy that's stalling."

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