Mattel CEO Defends Barad Severance Deal
Mattel Inc.’s new chairman defended the company’s $40-million-plus severance package to former Chief Executive Jill Barad, saying the board was obligated to fulfill her contract--and even sweeten it--in order to quickly make a leadership change for the good of the company.
Robert Eckert, who has been on the job three weeks, offered shareholders little more than a sympathetic ear at the El Segundo-based toy maker’s annual meeting at the Manhattan Beach Marriott.
Though unfamiliar with many Mattel specifics, Eckert did not seek answers from other Mattel senior managers or board members, all of whom sat beside him, stony even when specifically called upon by investors.
Shareholders, furious with seeing Mattel lose $7 billion in market value over the past year, interrupted Eckert several times to rage against board members who presided over the decline.
Eckert, the former head of Philip Morris Cos.’ Kraft Foods division, asked shareholders to hold their questions until the end of his presentation but gave up once it became clear that many were willing to shout from their seats if they were not recognized.
“We want this brought out,” said shareholder Raymond Kornfield, winning applause from the audience. “Our money went into this.”
“This,” besides Barad’s severance payout, was the company’s disastrous $3.5-billion acquisition of software maker Learning Co. That division, which last year lost more than $200 million, caused Mattel to lose money for the first time in a decade: $82.3 million in 1999, not including one-time charges.
Mattel now is trying to sell Learning Co., which some analysts believe may fetch as little as $200 million.
Despite shareholder outcries Wednesday, only one of four stockholder proposals aimed at making changes passed. That was an advisory measure, sponsored by the American Federation of State, County and Municipal Employees, that asked the board to eliminate or take a shareholder vote on its poison-pill or anti-takeover provisions.
After the meeting, board members and division leaders made a hasty exit rather than take questions from the crowd.
Mattel shares rose 31 cents, to close at $14.69, in New York Stock Exchange trading Wednesday.
