In a filing with the US Securities and Exchange Commission on 14 September 2004, Oneida Ltd. reported that CEO Peter J. Kallet and three other executives took pay cuts in summer 2004. At the same time…
In a filing with the US Securities and Exchange Commission on 14 September 2004, Oneida Ltd. reported that CEO Peter J. Kallet and three other executives took pay cuts in summer 2004. At the same time, the company allowed two executives to resign and become consultants in “Project Virtual,” as the company“s plan to outsource its flatware products has been named. “Based on the company“s current financial status senior executives have taken an appropriate reduction in compensation until the company rebounds financially,” said David Gymburch, speaking for Oneida. Kallet accepted a three-year contract on 1 August 2004 that cut his annual base salary by USD 60,000, to USD 300,000 from USD 360,000. Kallet, who will serve as company chairman, president and chief executive, might receive a raise should he meet certain objectives set by the board of directors. He might also receive an annual bonus, as will three other executives who agreed to pay cuts in two-year contracts with the company. J. Peter Fobare, vice president and general manager of consumer retail markets, saw his USD 199,000 annual salary reduced by USD 23,880, to USD 175,120. James E. Joseph, senior vice president and general manager of food service, saw his USD 213,000 salary fall by USD 25,560, to USD 187,400. Catherine H. Suttmeier, corporate vice president, secretary and general counsel, saw her salary reduced by USD 20,000, from USD 167,000 to USD 147,000. The salary reductions took effect 30 July 2004. On 9 September 2004 Oneida announced plans to cease manufacturing at its only US plant, at Sherrill, New York state, by early 2005. The company will make 500 workers redundant. Four hundred people will continue to work at the company“s headquarters and distribution centers as Oneida completes its transition from manufacturer to distributor of flatware, china and glassware. Oneida sources 75% of its products from factories overseas and resells it under its own brand name. The transition from manufacturer to distributor, called Project Virtual, is mentioned in the resignation letter of Executive Vice President Allan H. Conseur dated 22 July and the letter of Senior Vice President of Manufacturing Harold J. DeBarr dated 2 August. Both will continue as consultants for Project Virtual. Conseur resigned from the company as of 23 July 2004. He remains as a consultant on three projects: Project Virtual; the outsourcing of dinnerware; and in the company“s strategic restructuring. SEC documents show Conseur had a salary of USD 391,385 in fiscal year 2004, which ended 1 February 2004. He will be paid USD 33,000 a month in consulting fees as well as receive reimbursement of the premiums on his health insurance until 31 March 2004 for a total of USD 264,000. He is also eligible for up to USD 150,000 in bonuses for helping the company dispose of its manufacturing. Conseur will receive a 4% commission on sales of some goods to Disney“s two new theme parks and Marriott Hotels in Asia. After the end of his consulting engagement, Conseur will receive five months of severance, at USD 33,000 a month, for another USD 198,000. He is then able to receive payments from his deferred compensation account of USD 100,000 in September 2005, USD 40,000 over the next four months, and 78 monthly payments of what is left in the account beginning in February 2006. DeBarr, who resigned from the company 6 August 2004, remains as a consultant through 28 February 2005 earning USD 13,617 per month, or USD 95,319. The company has agreed to reimburse him for the premiums on his health insurance. Earlier in 2004, Oneida eliminated company paid health insurance for retirees, froze pension accruals and has missed a payment on its pension plans. Oneida lost USD 99 million in its last fiscal year. It has closed plants in Buffalo, China, Mexico and Italy in a bid to become profitable. The company blamed the losses on stronger competition from foreign factories and inefficient operations at its manufacturing plants. The Sherrill flatware plant alone lost USD 44 million in 2003. The losses have continued at USD 1.5 million per month in 2004, the company said.