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Blockbuster CEO Got 50% Raise in 2008

30 Mar, 2009 By: Erik Gruenwedel

Blockbuster Inc. reported a $374 million loss in fiscal year 2008 (ended Jan. 4), a 4.6% revenue decline to $5.29 billion, and a 60% drop in stock valuation, but that didn’t keep CEO Jim Keyes from earning $8.4 million in compensation, up more than 49% from fiscal 2007.

The chief executive for the Dallas-based No. 1 DVD rental company was paid a base salary of $750,000 in addition to a bonus of more than $402,000 in the form of fully vested shares of Blockbuster Class A common stock, according to a regulatory filing.

Keyes received an additional $1 million in stock awards on top of $6.26 million in stock options, among other compensation benefits.

The former 7-Eleven CEO, who has mandated transforming Blockbuster into a one-stop entertainment retailer, was rewarded for helping generate a 6.4% increase in domestic same-store sales (open at least 12 months), compared to a decrease of 6.9% in 2007.

Same-store sales are generally considered indicative of a retailer’s health and viability. Indeed, when deducting a non-cash charge of $435 million for the impairment of goodwill and other long-lived assets, Blockbuster reported adjusted net income of $80.4 million for the fourth quarter of 2008. This compares to adjusted net income of $57.8 million in the fourth quarter of 2007.

Separately, Blockbuster will hold its annual shareholder meeting May 28 in Dallas. Agenda items include re-election of nine board members, including the company's largest individual shareholder, rebel investor Carl Icahn, and changes to executive long-term compensation programs.


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