Friday, March 29, 2013 6:07 pm
Sears former CEO's compensation shrank in 2012
By The Associated Press
Louis D'Ambrosio's became CEO of Sears in February 2011 and stepped down last month due to heath issues involving his family.
In a proxy statement filed Thursday with the Securities and Exchange Commission, the retailer said D-Ambrosio's salary rose to $1 million last year from $930,769 in 2011. The value of his perks, like corporate housing and travel from his primary residence in Philadelphia to Chicago, shrank to $278,741 from $852,037 in 2011.
Sears gave D'Ambrosio a signing bonus of $150,000 and $8 million in stock awards in 2011 after he joined the company. But he received no bonus or stock awards in 2012.
The Associated Press reports the value of stock at the time they are granted. Of the $8 million in restricted stock awards given in 2011, $6 million would vest over a period of three years and $2 million was a restricted stock matching to vest over two years. The company said $3 million of it vested in 2012 and $3 million vested in 2013. Because D'Ambrosio left earlier this year, he forfeited $2 million that would have vested in 2014.
Edward Lampert, the company's chairman and largest shareholder, took over as head of the struggling retailer in February at the start of its 2013 fiscal year.
Sears disclosed earlier this month that it signed a contract with Lampert to keep him on as CEO of the company at a salary of $1 per year, but with the opportunity for a bonus of up to $2 million in cash or stock and up to $4.5 million in stock per year.
Sears, which operates the Sears and Kmart chains, is trying to turn itself around after years of weak sales and failing to attract new shoppers. Some investors were concerned about Lampert's appointment, as they wondered whether Lampert would continue the investment that D'Ambrosio made to improve the shopping experience at Sears and Kmart.
The company announced plans last year to restore profitability by aggressively cutting costs, reducing inventory, selling off some assets and spinning off others.
Sears reported a loss of $930 million, or $8.78 per share, for its 2012 fiscal year. The company's adjusted loss from continuing operations was $2.03 per share. Its annual revenue fell 4 percent to $39.85 billion from $41.57 billion.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2012 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.