Final irony: Perdue highest paid in '02

By Don Hogsett -- Home Textiles Today, 10/20/2003 12:00:00 AM

NEW YORK —

Lending a final, almost surreal coda to the collapse and demise of Pillowtex Corp., and the attendant loss of roughly 8,000 jobs, the highest paid executive in the entire home fashions industry last year, pulling down $2.4 million, was David Perdue. The former chairman and ceo of Pillowtex jumped ship after just 10 months on the job, taking with him a substantial signing bonus that lured him to the company he ultimately spurned.

For the short time he was on the job, Perdue took home a cash salary of $313,000, and another $2.1 million as a bonus from a company that never made money on his watch.

As if to suggest that failure pays better than success, in striking contrast the second highest-paid executive during 2002, taking home just half as much as Perdue, 1.1 million, was Jeffrey Lorberbaum, the president and ceo of Mohawk Industries, one of the most successful, and profitable, companies in the industry.

In the show position was John Bakane, president and ceo of Cone Mills, the big denim producer, which counts among its home fashions holdings Cone Jacquard and Carlisle finishing, the largest commission printer in the United States.

Among the other ironies of this year's Home Textiles Today Executive Compensation Survey, three of the five top spots on the ranking are leaders of companies that are now bankrupt— Perdue at Pillowtex, Bakane at Cone and Holcombe Greene Jr., former chairman and ceo of WestPoint Stevens, ousted earlier this year as the cash strapped and heavily indebted company was thrust into bankruptcy. Greene pulled down $899,000, down modestly from $899??? in 2001.

Reflecting the modestly improved circumstances of the industry in 2002 — as a rule, ceo's do as well as their companies, no better — there were more pay raises last year than in 2001. Last year, eight executives took home more pay, while five took home less. That's almost the opposite of the year before, when twice as many senior execs took a pay cut as got raises — seven losing ground, while only four advanced.

Among the more striking findings of this year's canvass: it was better to be a worker-bee than the boss at Quaker Fabric last year. Demonstrating that the buck really does stop with him, Larry Liebenow, ceo, gave himself only a modest raise last year as the company's sales and earnings both declined. Liebenow took home $660,000 in 2002, up just 3.1 percent from the year before, roughly in line with the rate of inflation, and the kind of raise that most American workers received.

But two of his workers took home a lot more than he did, thanks to stock options they exercised. Beatrice Spires, vp of design and merchandising, took home $722,000 after adding in $402,000 worth of options. Her base pay totaled $320,000, up 8.5 percent from $295,000 in 2000, meaning her raise was more than twice as big as her boss's. Tom Muzekari, vp of sales, made $695,000, $227,000 in pay, and another $468,000 in options.

Dollar amounts in thousands

Vendor salaries
(straight salary, excluding bonus, other cash compensation and stock options)

Vendor Cash Bonuses
More textiles execs picked up a bonus last year, 12 vs. just five in 2001. In some cases, as at Mohawk, it was the result of strong performance. For others, like David Perdue, the here-today gone-tomorrow ceo at Pillowtex, and his more stalwart successor, Michael Gannaway, the cash came as a signing bonus.

Vendor Stock Options Exercised
Given the rock-bottom prices at which most home textiles stocks are selling these days, options clearly aren't what they used to be; or the incentive they were designed to be. Most executives found their options under water last year, as they had been the year before and the year before that — meaning it would have cost them more to exercise the option than to buy the stock on the open market, making the options worthless. The exceptions to the rule last year were Mohawk Industries and Quaker Fabrics, two of the industry's stronger performers, where executives were able to parlay their options into something worth having. While only four were able, or wanted, to exercise options, that still beats 2001, when only one could do it.