Exec Quits, Gets a Raise

Times staff and wire reports

Robert McNulty, who resigned last week as chairman and chief executive of Inc., will get an $83,000-a-year pay increase working as a part-time consultant to the Internet retailer, which is under investigation by federal regulators. McNulty will earn $258,000 annually under a three-year consulting contract that requires him to work 30 hours a week. When he left the company, his salary was $175,000. "That does seem strange," said Graef Crystal, corporate pay critic and editor of the Crystal Report. "One theory might be, if he's going to hurt the shareholders less by working part time, then he should get paid more money."'s officers and directors, including McNulty, are under investigation by the Securities and Exchange Commission in connection with possible manipulation of the company's stock, documents show. The SEC suspended trading in the shares for 10 days in March because of concern about a lack of accurate information from the company. McNulty founded in November 1996 and owns a 31% stake. The Corona del Mar company has a market value of about $96 million. The former CEO will also be paid $500,000 to give up the four years remaining on his employment contract. The buyout agreement exempts McNulty from any losses because of lawsuits stemming from his actions at the company. The bonus and consulting agreement were disclosed in an SEC filing this week.'s new CEO, home-improvement retailing expert John Markley, gets $175,000 in salary. He said he had no comment about McNulty's consulting fees, adding, "I made my deal with the company." McNulty wasn't available for comment.

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