Valassis CEO Got Big Raise Despite Company's Losses

Last Updated Mar 18, 2009 6:17 AM EDT

Valassis CEO Alan Schultz had an awful 2008: Sure, revenues went up 6.2 percent but the company lost $207 million overall, NYSE threatened to delist the company (it's trading just above the penny-stock range), and the high-stakes litigation against rival News America Marketing Group has decimated the company's profits. He also had to lay off hundreds of his employees.

Despite all that, Schultz's total compensation went up by roughly 28 percent, to $3.6 million last year from $2.8 million the year before, according to a filing with the SEC.

This is in part because Valassis changed the rules for Schultz's pay in 2008. The company said:
Historically, we have established and structured our semi-annual cash bonus program to align executive goals with our earnings growth objectives for the current year. The incentive bonuses for our executives were historically contingent upon meeting semi-annual earnings per share targets; however, as previously disclosed, effective January 1, 2008, our Compensation/Stock Option Committee changed the performance target to adjusted EBITDA minus capital expenditures.
Of course, one reason for changing the basis of compensation from earnings per share to EBITDA (a type of profit) is that you suspect that in the coming months your stock is going to go into the toilet. Which is what happened.

The total compensation of the rest of his team went down:
  • Name, 2008 pay, 2007 pay
  • CEO Alan F. Schultz, $3.6 million, $2.8 million
  • CFO Robert L. Recchia, $1.3 million, $1.4 million
  • EVP Richard Herpich, $877,841, $1.1 million
  • EVP William F. Hogg, Jr., $1.2 million, $1.3 million
  • CEO NCH Mktg Brian Husselbee, $709,662
  • Source: SEC, numbers are rounded
And while parts of the company stopped offering their workers a free lunch once a month, no such sacrifices were made by Valassis's top execs. Here's their perks:
... including, among other things, all or a combination of, a car allowance, tax and accounting advice and country club membership.

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