Beth Steel CEO got no bonus

Miller was paid $900,000 in '02, when steelmaker had loss in Chapter 11

April 01, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Bethlehem Steel Corp.'s top executive earned $900,000 last year, but he and other top company officials were denied bonuses and stock options as the company posted a $739 million loss while operating under Chapter 11 bankruptcy protection, according to a company filing.

Robert S. "Steve" Miller Jr., Bethlehem's chairman and chief executive officer, has been paid a salary of $75,000 a month since joining the company on Sept. 24, 2001, a company spokeswoman said.

Bette Kovach, a Bethlehem spokeswoman, said that Miller did not have a contract and will not receive severance or retirement benefits.

Three weeks after Miller joined the company, Bethlehem filed for bankruptcy protection. For more than a year, the company explored sale and merger options with domestic and foreign steelmakers before negotiating a deal earlier this year to sell its assets to International Steel Group Inc. of Cleveland.

ISG plans to buy Bethlehem's assets, including the Sparrows Point plant in Baltimore County, and assume certain liabilities for $1.5 billion. The deal is subject to U.S. Bankruptcy Court approval on April 22 and would close in the second quarter, Bethlehem said.

Miller, 61, received a $900,000 salary but no other compensation last year except for an unspecified amount for a house rental allowance and automobile leases through September.

The previous year, he was paid $242,500 for three months' work and awarded 27,000 shares of restricted stock and 200,000 options, according to an amendment to the company's annual report filed Friday with the Securities and Exchange Commission.

Bethlehem's senior vice president and chief financial officer, Leonard M. Anthony, earned $320,000 - a 55 percent increase over his 2001 salary of $206,250. Lonnie A. Arnett, vice president and controller, earned $338,750, a 2.7 percent gain. Ronald F. Chango, vice president, general manager, and president of the Burns Harbor, Ind., division, had a salary of $330,000, a 2.9 percent decline. William H. Graham, senior vice president, general counsel and secretary, received $365,000, unchanged from 2001.

These four executives received restricted stock and stock options in previous years, but none last year. They also have "change in control" agreements that guarantee them severance benefits if they are terminated within two years under certain conditions, the filing states.

The four executives are among 14 top company officials who have such agreements in place, but the company is required to disclose information on only its top five earners, Kovach said.

Miller, though, does not have a "change in control" agreement, the filing states. He will likely return to his home in Oregon after he leaves Bethlehem, Kovach said.

Under the other executives' agreements, they would receive a lump-sum payment of up to two times their annual base salary and average bonus. The average bonus is calculated over a five-year period and the executives did not receive bonuses the past three years, Kovach said.

They also would receive a lump-sum payment of benefits under certain excess or supplemental benefit plans, and a payment to cover any tax liability they might incur as a result of payments they receive under the agreement, the filing states.

Kovach said the agreements are significantly less than what they were in the past several years after the bankruptcy court cut them by 50 percent after the company filed for Chapter 11.

"The change in control agreements have been in place for the past several years," said Kovach. "This is not because of the sale" to ISG.

It remained unclear yesterday whether the 14 executives will be employed by ISG. If ISG terminates them, then their change-of-control agreements would be in effect, Kovach said.

None of the executives will receive continuing health care, life insurance or disability coverage as part of the agreements, she said.

Bethlehem received court approval to terminate health care and life insurance benefits for roughly 95,000 retirees and dependents, including approximately 20,000 in the Baltimore area, after claiming it could no longer afford the $20 million monthly bill.

Yesterday was their last day of health care coverage.

Retirees have the option to pay the full premium for the same health care benefits for the next six months, at a much higher out-of-pocket cost, until they find replacement coverage.

In 2002, Bethlehem's net sales increased 7 percent to $3.57 billion, while its net loss lessened to $739 million from $1.99 billion in 2001.

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