Disk-drive maker Western Digital Corp. may be in the financial doldrums, but its recently retired chief executive, Charles A. Haggerty, has reason to be cheerful.
Haggerty, 58, picked up $1.7 million last year in total compensation--a 63.2% increase over the previous fiscal year, according to company reports.
Haggerty did not receive a salary increase or a bonus, reflecting the Irvine manufacturer’s dismal performance. The industry’s third-largest disk-drive maker has recorded nine consecutive quarters of red ink--more than $1 billion in operating losses since mid-1997.
But Haggerty more than doubled his $750,000 base salary with a payout from his long-term retention package, the terms of which were set before Western Digital went into its decline.
“This is something fairly generic to CEO pay packages,” company spokesman Robert Blair said. “The nuance here is that this was put into place when Western Digital was doing very well and the stock price was at an all-time high.”
Based on the company’s average stock price in 1997, when it hit a high of $54 a share, the retention plan earned Haggerty about $764,000 for the fiscal year that ended June 30--more than double the $309,000 the package yielded the previous year. The stock closed unchanged Monday at $3.94 a share.
Haggerty also added to his 1999 pay by cashing in about $208,000 worth of stock options.
Haggerty took control of the company in 1993. Under his leadership, the company initially enjoyed accelerated growth, quadrupling its annual revenue to $4.2 billion. But Western Digital’s fortunes have spiraled downward since 1997 as a bruising price-cutting war hurt all hard-drive manufacturers.
Haggerty announced in July that he would retire, relinquishing his positions as the company’s chairman and chief executive once replacements were chosen.
Matthew Massengill was named to succeed him as chief executive last month. Thomas E. Pardun, president of MediaOne Group Inc.'s International-Asia/Pacific Division, and a Western Digital director since 1993, will replace Haggerty as chairman after the pending merger between AT&T; Corp. and MediaOne is complete.