While Bed Bath & Beyond (BBBY) closed virtually all of its 1,500 stores on March 23 and said Friday they’ll remain closed through at least May 16, it may lift executive pay cuts on May 17. The New Jersey-based company said CEO Mark Tritton and other top executives have agreed to extend the 30% reductions in their base salaries only through May 16. They were originally announced April 2 and scheduled to end May 2. The company continues to offer online sales.
|Original Base Salary||Reduced Salary|
|EVP Chief Merchandising|
Many other retailers that have slashed executive salaries have imposed bigger cuts or for longer periods.
- Columbia Sportswear Co (COLM), CEO Tim Boyle’s annual salary was reduced in March from $3.3 million to $10,000. Continuing independent directors’ compensation was cut by 50 percent through January; salaries for director-level and above were reduced between 5% and 15%.
- Foot Locker Inc. (FL), the company reduced the salary of its CEO by 40% effective May 3 and through at least Aug. 1, while other senior level executives will see cuts of 20%.
- Buckle, Inc. (BKE), which has closed all stores indefinitely, its chairman and its CEO are both forgoing their salaries until normal business operations resume.
- Ethan Allen Interiors Inc. (ETH), the CEO on April 1 offered to temporarily forego his salary at least through June 30, and said senior managers’ salaries will be reduced by up to 40%.
- GameStop (GME), its CEO last week elected to temporarily reduce his salary by 50% and that of other top executives by 30 percent through June 30.
- At Shoe Carnival, Inc. (SCVL), where all 419 stores are closed but online sales are available, the salaries of top executive officers were cut by 20% April 5 and will remain reduced until at least 50% of the Company’s store locations are re-opened. The company is continuing to pay associates for now. It said it will evaluate this, depending on how long stores remain closed.
- At TJX Companies, Inc. (TJX), which closed its store and online operations, the base salaries of its CEO and executive chairman each were reduced by 30% in early April, through July 4. The salaries of other executive officers were cut by 20%.
A Challenging Start for Tritton
Tritton became CEO in November, after a stint as Executive Vice President and Chief Merchandising Officer at Target Corp (TGT). His 30 years in retail also includes positions at Nordstrom, Nike and Timberland.
BBBY shares jumped nearly 22%, to $11.69, the day after Tritton’s appointment was announced, on hopes he would improve the in-store and online shopping experiences and broaden the merchandise. The stock closed the year at $16.92, up 76% over the day Triton’s hiring was announced. But the honeymoon started fading, even before COVID-19 walloped retailers. Bed Bath & Beyond’s share price plunged to $5.42, a drop of 68%, by March 19, the day before the company said it was closing stores. The stock is up 18% since then.
Effort to Revitalize Has Included Aggressive Board Refreshment
The company overhauled its board of directors a year ago, when it announced that five independent directors would step down, two co-founders (Warren Eisenberg and Leonard Feinstein) would retire from the board and its lead independent director (Patrick Gaston) would become independent chairman. Five new directors were announced effective May 1, 2019. They are:
- Harriet Edelman – Special Advisor to the Chairman, Emigrant Bank
- Harsha Ramalingam – President and Owner, Ramalingam Consulting
- Andrea Weiss – Founding Partner, The O Alliance, LLC and Chief Executive Officer and Founder, Retail Consulting Inc.
- Mary Winston – Founder and President, WinsCo Enterprises Inc.
- Ann Yerger – Advisor, Spencer Stuart North America Board Practice
Of the four remaining independent directors, three had been appointed in the previous two years as part of what it called its “ongoing refreshment program.” The four are:
- Stephanie Bell-Rose – Senior Managing Director, Corporate Strategy, TIAA and Head of TIAA Thought Leadership Governing Board and Head of TIAA Institute
- Patrick Gaston – Chief Executive Officer of Gaston Consulting
- Johnathan B. (JB) Osborne – Co-Founder and CEO, Red Antler
- Virginia Ruesterholz – Former Executive Vice President, Strategic Initiatives, Verizon Communications, Inc.
The five departing directors were Dean Adler, Stanley Barshay, Klaus Eppler, Jordan Heller and Victoria Morrison.
A Larger Board and Increased Board Fees
The board now has 14 directors which is higher than its peers. In addition to refreshing board members, the company also updated its director compensation for fiscal year 2019. Most notable in the disclosure is the increase in retainers for the chairman and chairs of the various committees.
The company’s chairman now receives a $200,000 retainer in addition to standard annual director fees and the chairs will receive additional fees of: $25,000 for Audit Committee chair; $25,000 for Compensation Committee chair; $16,500 for Nominating and Corporate Governance Committee chair; and $20,000 for Business Transformation and Strategy Review Committee chair. The annual directors fee of $90,000 remained unchanged from fiscal year 2018.
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