Sharper Image CEO Agrees to 50% Pay Cut

Sharper Image Corp., which sells products including robotic vacuum cleaners and massage chairs through its catalogs and at 190 stores, said Tuesday that Chief Executive Richard Thalheimer had agreed to a 50% pay cut this year.

On Feb. 1, Thalheimer and other Sharper Image executives agreed to accept pay reductions for the year ending Jan. 31, 2007, the San Francisco-based company said in a regulatory filing. In 2005, Thalheimer earned $990,000, according to company filings. He didn’t receive a bonus last year.

The move came after Sharper Image last week said sales fell 13% for its fiscal fourth quarter because it spent less on advertising and faced lower demand for air purifiers and massage chairs. The company expects that consumer appetite for the two product lines will weaken further this year.

“We are reacting to what we are seeing on the revenue side, and throughout fiscal 2005, we discussed looking at expense controls,” Sharper Image spokesman Tersh Barber said. Salary cuts are “a way for executives to express their commitment to the company.”

Sharper Image shares dropped 41% in the last year. The stock rose 31 cents to $10.19 on Tuesday.

President and Chief Operating Officer Tracy Wan, who earned $418,000 in 2005, agreed to cut her salary 15% this fiscal year. Other executives agreed to pay reductions ranging from 2% to 17%, the filing said.

Each member of the company’s board agreed to a 15% reduction of their quarterly retainer for the year.

The board has seven members, including Thalheimer and Wan, Barber said. The five nonemployee directors had been paid a quarterly retainer of $6,000. Those who made up the audit committee were paid an additional $1,000 a quarter, Barber said.