Martha Stewart's bonus for 2002 was reduced 42%

But she's getting big raise for rental of her home

April 02, 2003|By NEW YORK TIMES NEWS SERVICE

Martha Stewart Living Omnimedia Inc. had the roughest year of its short life as a public company in 2002.

In June, Martha Stewart, its chairwoman and chief executive, came under scrutiny for her sale of shares in ImClone Systems Inc., and her company's share price, ad sales and public image all began a downward spiral from which they have yet to recover.

And the board has expressed its disappointment by giving Stewart a bonus of $680,000 - about 42 percent less than the $1.16 million she took home in 2001, according to the company's proxy statement filed late Monday with the Securities and Exchange Commission.

"The compensation committee believes that the compensation of the chief executive officer should be heavily weighted to corporate performance," the proxy states, "and that the reduced level of compensation paid to Stewart with respect to 2002 reflects that objective."

Stewart is guaranteed a bonus of at least $300,000 under her employment agreement. The shrinking of her bonus approximates the slide in the share price at Martha Stewart Living Omnimedia.

At the end of last year, the stock traded at $9.87, up from a low of $5.26 in early October, but well below the $19 a share it commanded before Stewart's name surfaced in the ImClone insider-trading investigation June 6.

She remains under investigation by the SEC and the Justice Department but has not been charged with any crime in the sale of nearly 4,000 ImClone shares on Dec. 27, 2001, the day before a critical announcement by the pharmaceutical company that sent the stock into a tailspin.

Stewart is getting a raise elsewhere. The compensation from the company for its use of her homes as backdrops for magazine and television shoots will be raised to $2.5 million a year as of January, the proxy states, up from $2 million.

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