Company Slashes Workers While Boosting Lawyer's Pay
Boston-based clothing retailer Talbots is imposing major cuts throughout its workforce -- everywhere, that is, except in the C-suite, where the company's CEO and its top legal executive are receiving sizable boosts to their incomes.
Earlier this month, the company cut 325 jobs -- some 20 percent of its workforce. Those cuts came just three months after an earlier round of layoffs in which the company slashed 370 jobs and froze its employee pension plan. The company posted a first-quarter loss of $23.6 million.
But even as Talbots was announcing this latest round of cuts, it was also announcing that it would pay an additional $1.2 million to its CEO and president, Trudy Sullivan, and increase the base salary of its top legal executive, Executive Vice President Richard T. O'Connell Jr., by 23 percent, to $500,000. Talbots also gave O'Connell an extra 50,000 shares of restricted stock and an option to buy 74,000 shares.
According to Forbes.com, O'Connell's previous base salary was $406,292. His total 2008 compensation in cash, stock and other earnings was $1.3 million. The 58-year-old O'Connell has been with Talbots since 1988. Prior to joining the company, he was vice president and group counsel of the Specialty Retailing Group at General Mills.
As for CEO Sullivan, her $1.2 million payout was mandated by her employment contract to offset recent reductions in her retirement benefits. She earns a base salary of $1 million and received a total compensation package in 2008 of $3.35 million.
Not a good time to be in the clothing business, unless you happen to run the business or its legal affairs. If the workers are being asked to tighten their belts, shouldn't the people at the top set an example?
Posted by Robert J. Ambrogi on June 25, 2009 at 03:00 PM | Permalink
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