The board of directors of Federated Department Stores Inc. (Cincinnati) has approved a $50,000 raise for chairman and ceo Terry Lundgren, and a $3.3 million bonus.
The department store retailing leader’s directors granted the boost in compensation about a month after Lundgren engineered the deal to buy rival May Department Stores Co. (St. Louis) for $17 billion. The raise was revealed in a filing earlier this week with the Securities and Exchange Commission.
Lundgren took over as ceo in February 2003 and as chairman in January 2004, replacing James Zimmerman, who is under indictment in New York for allegedly lying in an antitrust case. Based on the payouts disclosed, Lundgren, 53, received a 24 percent increase in combined base pay and bonus last year to $4.6 million. His base pay is now $1.3 million. Although Federated’s net earnings were down 15 percent in 2004 and revenue was flat at $15.3 billion, the company has paid off 16 percent of its long-term debt and lowered its shares outstanding by 6 percent as of January 29. Two weeks ago, company shares hit an all-time high of $64.54. They closed yesterday at $61.67, off $1.43.