The right thing to do during this severe downturn.....
Corning's Top Execs Get No 2001 Bonuses
Thu Mar 7, 2:05 PM ET
CHICAGO (Reuters) - Corning Inc. , the world's largest maker of fiber-optic cable, on Thursday said its top executive did not receive bonuses for 2001 because of the telecommunications slowdown that hurt much of its business.
Minimum financial goals as set by compensation committee were not met, so no bonuses were awarded to the top executives, the Corning, New York-based company said in its shareholder proxy statement filed with the U.S. Securities and Exchange Commission (news - web sites). It also delayed its annual salary reviews for 2002 that are normally held on Jan. 1.
"The year 2001 was an extremely disappointing year as Corning faced significant downturns in all of its telecommunications businesses as well as a general softening in many of its other businesses," Corning said in the proxy.
"The widespread downturn in the telecommunications industry severely impacted the financial performance of Corning in 2001. As a result, all of Corning's compensation programs reflect this very weak performance," the company added.
Corning also said the top executives will forego half their annual cash "variable compensation" targets based on company and individual performance in exchange for a one-time special grant of stock options as a way to encourage and reward long-term performance.
The executives will remain eligible for Corning's 2002 bonus program.
Roger Ackerman, who stepped down as chief executive officer on Jan. 1, 2001, and retired as chairman on June 21, 2001, received a 2001 salary of $425,000 for his half year, according to the proxy. The rate was unchanged from the base salary of $850,000 the previous year. Other compensation totaled almost $218,000.
In 2000, Ackerman received a bonus of almost $1.6 million.
He also received more than 5.4 million restricted stock awards and more than 37,000 stock options last year, compared with more than 4.3 million restricted stock awards and almost 148,000 options the previous year, according to the proxy.
John Loose, who became president and CEO on Jan. 1, 2001, saw his base salary rise to $850,000 last year from $650,000 the previous year due to his promotion from chief operating officer, according to the proxy. His other compensation totaled more than $218,000.
He also received almost 3.8 million in restricted stock awards and more than 2.6 million stock options last year, compared with more than 5.4 million restricted stock awards and 2.2 million options the previous year, according to the proxy.
With strike prices ranging from almost $60 to $9.95 at the low end, all the stock options are virtually worthless at the moment since Corning's stock is trading below $8 on the New York Stock Exchange (news - web sites).
Corning also said in the proxy that it paid PricewaterhouseCoopers $3.4 million last year for auditing services and another $10.8 million for nonaudit services.
While Corning said it will now use Ernst & Young for internal audit preparation work, it has not decided whether to bar its auditors from doing other consulting work.
Corning said PricewaterhouseCoopers has been hired to handle the 2002 audit.
Companies have come under increasing pressure to separate auditing and consulting work after the collapse of energy trading giant Enron Corp. . The company, which filed for bankruptcy last fall, used Arthur Andersen for both auditing and consulting.
Telecoms equipment giant Lucent Technologies Inc. recently said it would no longer use the same company for auditing and consulting services. |
