Outgoing Kmart chief gets $90 million in stock options
Monday, October 18th 2004, 10:18 am
News On 6
TROY, Mich. (AP) _ Outgoing Kmart chief executive Julian Day is getting about $90 million in stock options for his leadership at the discount chain, which emerged from bankruptcy in May.
Day resigned Monday to make way for fast-food industry veteran Aylwin Lewis as head of Kmart Holding Corp., but will stay on the board.
Day was named Kmart's CEO in January 2003 and had been president and chief operating officer since March 2002.
If the company meets certain performance goals, Day's exit package will total about $94 million by January 2008, based on Kmart's closing stock price Wednesday of $90.31, The Detroit News reported Thursday.
Kmart closed nearly 600 stores and shed 57,000 employees after filing for Chapter 11 bankruptcy in January 2002. The company earned $155 million for the 13 weeks that ended July 28, compared with a loss of $5 million a year earlier.
Day deserves the money, said retail analyst Ulysses Yannas of Buckman, Buckman & Reid in Red Bank, N.J.
``From heavy losses, he created profits,'' Yannas said. ``Look, it's fair, because when Day took over it was a company in huge trouble, and most people were saying it wouldn't survive.''
But Farmington Hills compensation expert Kenneth Dalto said: ``It's excessive, especially for a guy that's been in it for a year. Did he create that much value? Probably not, but that's the deal they struck to attract him.''