March 21 (Bloomberg) -- Edward Lampert, the billionaire hedge-fund manager who controls Sears Holdings Corp., agreed to remain the retailer’s chief executive officer with a $1 annual salary after taking over last month amid slumping sales.
Lampert’s new contract is effective Feb. 1, according to a regulatory filing yesterday. During the first three years of his tenure, he’ll participate in the company’s incentive plan with a target payout of $2 million a year. Lampert, 50, will also get $4.5 million a year in Sears stock.
He took over in February after Lou D’Ambrosio stepped down for a family health matter after less than two years, as the department-store chain works to snap a streak of quarterly sales declines stretching back to May 2007. Lampert is the Hoffman Estates, Illinois-based company’s fifth CEO since he merged Sears and Kmart in March 2005.
The retailer has been selling outlets and assets and last year completed the spinoff of its smaller-format Hometown and other stores in a move that raised $346.5 million from a rights offering and a $100 million cash dividend from Sears Hometown. D’Ambrosio had worked to cut inventory and debt, increase online sales and use data from loyalty-program customers to spur revenue growth.
Last month, Sears posted a fourth-quarter deficit that was larger than it had forecast. The $489 million loss, narrower than the $2.4 billion it posted a year earlier, was wider than its prediction for a loss of $280 million to $360 million, excluding the potential impact from store closings and other items. Revenue fell 1.8 percent to $12.3 billion.
In a letter to shareholders, employees and customers, Lampert highlighted improvements such as better clothing sales and the retailer’s growing loyalty program.
For the current full year, analysts on average estimate the company will report a loss of $313 million and sales will fall 7.4 percent to $36.9 billion, according to data compiled by Bloomberg.
Sears fell 1.2 percent to $51.68 at 10:52 a.m. in New York. The shares have gained 25 percent this year, compared with an 8.4 percent gain for the Standard & Poor’s 500 Index.
To contact the reporter on this story: Lauren Coleman-Lochner in New York at email@example.com
To contact the editor responsible for this story: Robin Ajello at firstname.lastname@example.org