Blockbuster Shareholders Want Say on Pay15 May, 2007 By: Erik Gruenwedel
With corporate executive compensation increasing regardless of performance, Blockbuster Inc. shareholders last week passed what is reportedly the first-ever resolution seeking an advisory vote on executive officer pay.
The largely ceremonial measure, put forth by William C. Thompson, Jr., comptroller, City of New York, on behalf of the New York City Employees' Retirement System, which owns Blockbuster stock, was passed by 57% of shareholders in the May 9 proxy.
“It's a nonbinding proposal and the board will take it under advisement,” said spokesperson Randy Hargrove.
Increasingly, boards of publicly held companies have come under scrutiny for lavishing excessive compensation perks, including bonuses and stock options, on select executives despite their spotty performances.
Circuit City Stores Inc. recently revealed it had paid its CEO of nine months $17.1 million in salary and stock in 2006 despite posting repeated poor quarterly results. Then last month the retail chain terminated 3,400 employees, claiming their hourly pay was too high.
In January, the CEO of Home Depot was given $210 million in compensation after his dismissal for lackluster results.
In March, Blockbuster chairman and CEO John Antioco announced he was leaving at the end of the year shortly after it was disclosed there had been a fall out with the board over his 2006 bonus.
Apparently, there was no dispute with Frank Paci, EVP, strategic planning and business development.
Days after receiving more than 170,000 shares of common stock for performance-based goals in fiscal 2006, Paci received a $21,700 increase in salary to $455,700. He also sold 20,663 shares of stock for more than $103,000 as part of pre-arranged stock option plan.
Blockbuster lost $46.4 million in the first quarter fiscal 2007 ended April 1.