Despite financial woes, Aquila execs received big bonuses
Monday, July 8, 2002
KANSAS CITY, Mo. -- A month before Aquila Inc. announced plans to fire 500 employees to save about $35 million a year, five top executives were paid a total of $30 million in bonuses.
Leo Morton, a senior vice president and chief administrative officer, said the incentive pay was crucial because it awarded performance that was excellent at Aquila last year. Much of the unraveling in the energy sector has come this year, he said.
"No one anticipated where we are today," Morton said.
When the board's compensation committee decided in February to award bonuses beyond the established salary and incentive packages, it cited rapid growth the previous year. But already, Aquila's stock price had fallen from a high of $37.55 in May to $23.53 on Feb. 1.
Still, the committee of three board members:
Determined the nearly $6 million in salary and bonuses destined for chairman Richard Green Jr. was insufficient because of his work in cultivating the company's energy trading operation. As a result, the committee put an additional $4.5 million in "discretionary" cash and stock into his paycheck in "recognition of his contribution," pushing his total compensation to more than $10.3 million.
Decided Robert Green, president and chief executive officer deserved an extra $4.5 million in cash and stock. He wound up receiving more than $9.4 million in salary and bonuses.
Gave three other executives a total of $12 million in bonuses on top of their salaries, most tied to existing incentive packages.
In all, bonuses for the five executives totaled about $30 million, plus stock options.
Aquila has announced a cutback this year in long-term incentive pay, which was a part of the executive bonuses awarded last year.
Aquila shares closed Friday at $7.47.