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Employment

Corning's Ex-CEO Bags Over $10M

In a year when layoffs totaled more than 4,000, Corning Inc. (NYSE: GLW) paid its ex-CEO John W. Loose more than $6 million.

That's just for starters. According to a proxy statement recently filed with the Securities and Exchange Commission (SEC), Loose, who retired at 60 from Corning's management and board last April after a 38-year career with the company (16 months of which included his CEO stint), was awarded $5,902,000, plus $283,333 of his base salary, which was $850,000, for 2002. None of the preceding totals includes Loose's stock awards or additional compensation

As part of what Corning terms a "settlement agreement" with Loose, the company followed these amounts up with another $4,540,000 early in 2003. In addition, Corning has purchased Loose's principal residence "at its appraised value," according to the SEC filing.

According to Corning spokesman Dan Collins, the company agreed to purchase Loose's home as part of his retirement agreement. The appraised value was about $800,000. About half of the $4,540,000 payment represented compensation to Loose for what he put into his home and property above the appraised value, while the rest was meant to cover his tax liability for the payment from Corning.

Starting this year, Loose will receive $925,000 per year in an "enhanced pension benefit."

Bottom line? Corning has awarded its former CEO well over $10 million in the eight months since he retired. .

Coincidentally, $10 million is the minimum amount Corning expects in net loss this quarter (see Corning Confirms Guidance). The company continues to struggle through restructuring, although execs expect a return to profitability this year (see Corning: Profits on the Horizon and Corning Woes Continue).

The latest Loose compensation figure is even higher than the amount that made local headlines in Corning's upstate New York headquarters last August. Then, readers of the Elmira, N.Y., Star-Gazette expressed "disgust" and "puzzlement" over reports of Loose's $6 million severance package.

Corning's other execs didn't fare as well as Loose last year, though they can't be hurting. Top pay went to new CEO James R. Houghton and president and COO Wendell Weeks, who each earned $633,333 -- with no bonus.

Indeed, Corning's executive compensation committee called 2002 "clearly a very disappointing year for Corning, its employees and its shareholders." According to the committee, "Actual performance in 2002 fell short of the goals set by the Committee, resulting in zero cash bonuses and significant year-over-year reductions in equity grants made to Corning's named executive officers."

— Mary Jander, Senior Editor, Light Reading

Peter Heywood 12/5/2012 | 12:28:46 AM
re: Corning's Ex-CEO Bags Over $10M My contribution: "Hang Loose"
BobbyMax 12/5/2012 | 12:28:45 AM
re: Corning's Ex-CEO Bags Over $10M America has sanctioned corruption in almost all walks of life. We have become so tolerant of corruption that we do not say or do anything. The corruption has been steadily incresing since the mid sixties. It has permeated all industries at the top level. government agencies at all levels.

I get breathless when I hear the kind of corruption at Corning. This is the time to investigate them. Perhaps Wall Street can impose some permanent sanctions on Corning. Federal Government, Department of Justice, and SEC are not likely to take any action.

These corruptions have lead to diminished quality of products. All Us companies tolerate diminished quality of products and layoffs of worked in favor of paying to the CEOs.

Hybrid 12/5/2012 | 12:28:40 AM
re: Corning's Ex-CEO Bags Over $10M Okay - you suggest sanctions.
Could you please specify the "corrupt" act that Corning has been charged with?
- Loose negotiated a contract. Legally. Well within normal limits of executive reward for a Fortune 500 company. A little on the light side in fact compared to industry averages.
- Corning paid him in accordace with that contract. What did you expect? Corning's integrity is intact (it's bulletproof anyway with Jamie Houghton at the helm).
If this last year had been a boom year - you'd be silent. Funny that isn't it?
I am equally repulsed exorbitant salaries like that Loose and his predecessor Ackerman recieved, but WHAT corrupt act on earth are you talking about? None of the executive committee at Corning is taking bonuses again this year. That's admirable, not currupt.
One other point - you don't know what he is going to do with the money. He might be investing as we speak in a V.C. funded startup that a large number of readers are employed by. What's wrong with that? You might be employed by his money one day......
sidepipes 12/5/2012 | 12:27:49 AM
re: Corning's Ex-CEO Bags Over $10M Does this post mean that BobbyMax does not include himself as an American?

Sidepipes
digits 12/5/2012 | 12:27:33 AM
re: Corning's Ex-CEO Bags Over $10M What about:

Cut Loose
rs50terra 12/5/2012 | 12:26:06 AM
re: Corning's Ex-CEO Bags Over $10M Boby,
It's "American" not "Amrican".
And why do we always have to run to the Feds for justice? This is a public company and the compensation of the executive management is awarded by a compensation committee of the board. The people who have to solve the problem are the investors. If you hold stock, you should go make your voice known to the Board.
Or vote with your feet (actually your phone or PC) and sell, sell, sell!
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