Jos. A. Bank extends $825,000 consulting contract for former CEO

Wildrick announced retirement in 2008 after a decade

May 13, 2011|By Andrea K. Walker, The Baltimore Sun

Men's clothing chain Jos. A. Bank Clothiers Inc. has extended a contract with its former CEO that pays him $825,000 a year in consulting fees, more than the base salary of some of its current executives.

Robert N. Wildrick, 66, will also continue in his duties as chairman of the board, a position for which he was paid an additional $150,000 last fiscal year, according to a regulatory filing Friday with the Securities and Exchange Commission. Wildrick's total compensation for fiscal year 2010, which also includes stock awards and other retainer fees, was $1.2 million.

Wildrick announced his retirement in 2008 after a decade at the Hampstead-based company, but has stayed on the payroll.

The company said at the time that it created the consulting position as part of a succession plan. The board wanted Wildrick to stay on to help the new president and chief executive, R. Neal Black, whose background was in merchandising but not finance. That contract expired in 2009, but with the extension approved by the board of directors' independent members, Wildrick will remain until 2014.

Analysts who follow the company said other corporations have kept on a former head as a consultant — particularly if the CEO did a good job. But some compensation and governance experts said most companies are moving away from such pricey agreements, which bother shareholders in an era of increased financial scrutiny.

"Wildrick as the CEO engineered the turnaround of the business years ago, so he has been an important figure," said Richard Jaffe, an analyst with Stifel Nicolaus who follows the company.

During Wildrick's 10 years in the top job at Bank, the company transformed from a struggling, regional chain into a national brand. It opened 300 stores under his tenure and revenue increased from $108 million in 1999 to $604 million for the fiscal year that ended February 2008, the year Wildrick announced his retirement.

Today, the company has more than 500 stores and sales of $858.1 million in the latest fiscal year. Earnings were up 21 percent from the prior year to a record $85.8 million.

"It's nothing that registers to me as a negative or anything that I should worry about," Mark K. Montagna, an analyst with Avondale Partners LLC, said about the consulting arrangement.

Paul Hodgson, who follows corporate governance and compensation trends, said that hiring former executives was common in the '90s but avoided these days. He said Wildrick could advise the company solely in his role as chairman.

"One would think that those fees he gets as chairman were sufficient for the company to have access to the expertise without additional cost of paying him as a consultant," said Hodgson, a senior research associate at GovernanceMetrics International.

Wildrick, who lives in Palm Beach, Fla., and is president pro tem of the town council there, said in a phone interview Friday that the fee is justified because he spends so much time on his consulting duties. He also noted that his contract doesn't allow him to work for any other retail company as a way to earn a living.

Shareholders will vote on whether to re-elect Wildrick and other board members at the company's annual meeting next month.

Wildrick described the agreement as form of "insurance" for the company that helped with the transition of power to Black. Wildrick said he doesn't anticipate staying in the consulting role beyond 2014.

"It is a very strong stated goal that what we want to do is have a seamless transition of management from one person to the next," Wildrick said.

Compensation expert Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, questioned the cost for Wildrick's services.

Wildrick's $825,000 consulting fee is more than the base salary of the company's top five executives, although total compensation of most of the executives is higher.

Black's base salary in fiscal year 2010 was $762,500, but total compensation was nearly $4 million, including incentives and stock awards. Robert B. Hensley, executive vice president of human resources, real estate and loss prevention, had a base pay of $482,500 and his total compensation was more than $1 million.

andrea.walker@baltsun.com

http:// twitter.com/ankwalker

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