RetailWire -- The Power of Collective Thinking.

Featuring the retail industry's most engaging online discussions. For FREE registration, visit: www.retailwire.com 

NY Times Questions A&P Chief Exec's Pay Raise

12/18/02

By George Anderson

The Great Atlantic and Pacific Tea Company and its chief executive, Christian Haub, are among those cited in a New York Times article on executive compensation.

The Times questions whether corporate compensation committee members have the independence to say no to chief executives and other top management seeking pay increases. "An examination of almost 2,000 corporations finds that at hundreds of them, members of the compensation committee work for or do business with the company or its chief executive. In some cases, they even belong to the executive's family."

Great Atlantic and Pacific Tea (A&P, Waldbaum's, Farmer Jack, etc.) has a compensation committee that is largely beholding to Mr. Haub, according to the Times report. Two of the three members of the compensation committee work on behalf of Mr. Haub's family.

In 2001, Mr. Haub was given a 53 percent raise over the previous year despite eliminating dividend payments to investors, closing stores and fighting to regain its footing in a highly competitive grocery market.

Moderator's Comment: What is your take on the top executive's pay issue?

It needs noting that Rick De Santa, vice president for corporate affairs at A&P told the New York Times that Mr. Haub's package was in line with the retailer's profits in 2001. He also told the newspaper the board was considering changes to the compensation committee. [George Anderson - Moderator]

Comments


From what I read, the bonus was for the company's return to profitability in 2001, not "in line" with its profits. And a $1.2 million compensation package isn't outrageous considering the rest of the industry.

Having said that, the industry's habit of overpaying its CEOs is in itself outrageous, especially when the deck is stacked in the compensation committee. To quote John Kenneth Galbraith, "The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself."
Warren Thayer, Editor & Managing Partner, Frozen & Dairy Buyer - Braintrust Panelist


The issue of how compensation committees reward CEOs today (with help from hired guns known as compensation consultants) has become comical and ludicrous. The cynical examples keep cascading and The Great A & P Tea Company is one of the latest and, perhaps, one of the most egregious since the Haub family is one of the richest families in Germany.
Gene Hoffman, President, Corporate Strategies International - Braintrust Panelist

©2009 RetailWire LLC.
All rights reserved. No part of the contents of this website may be reproduced or transmitted in any form or by any means except as may be expressly permitted in writing by the copyright owner.