HomeBase Chief Gets 13% Raise

HomeBase Inc.’s chief executive, Allan Sherman, received a 13% pay raise along with increased responsibilities last year at the struggling 83-store home-improvement chain.

Sherman’s base pay climbed to $511,538 for the fiscal year that ended Jan. 31 and, altogether, took in $1.75 million, according to the company’s annual proxy statement filed Thursday with the Securities and Exchange Commission.

Irvine-based HomeBase, trying to expand in an increasingly crowded and competitive hardware industry, saw its net income plunge to $1.5 million last year from $21.4 million in 1996, thanks to a $27-million charge for store closures.

Sales at stores open at least a year--a key measure of growth--fell 1.7%.

HomeBase’s stock price rose 10.8% during its fiscal year. By comparison, the Russell 2000 index of small- and mid-sized companies rose 16.4% during the same period.

Sherman, 53, began the year as president of HomeBase, and became its chief executive in July when it was spun off into a separate publicly traded company from Waban Inc.

Contributing to Sherman’s pay package last year were $801,943 in gains from the exercise of stock options; a $125,120 benefit from an interest-free home loan made by the company; a one-time $93,332 payment related to the spin-off; an $85,475 reimbursement for tax liabilities tied the loan; an $83,190 payment under the company’s growth-incentive plan, and $30,354 in company contributions to his retirement plan.

Sherman also was awarded options on 200,000 HomeBase shares, half to be exercised at $7.82 a share, half at $8.44 a share.

He holds unexercised options on 759,447 shares of HomeBase stock, which were worth $1.26 million at fiscal year end.