The Associated Press | October 14, 2002
Agway Inc., now reorganizing under Chapter 11 bankruptcy protection, paid hefty bonuses to several of its top executives even as the cooperative was losing millions of dollars.
Documents filed with the U.S. Securities and Exchange Commission showed that over the past three fiscal years, Agway paid a total of about $2.5 million in bonuses to five of its top managers, The Post-Standard of Syracuse reported Monday.
The DeWitt-based cooperative, owned by 69,000 farmer-members in the Northeast, filed for bankruptcy on Oct. 1, citing liabilities of $1.51 billion and assets of $1.57 billion. Donald P. Cardarelli, Agway's president and chief executive officer received a bonus of $332,008 in fiscal 2001 when Agway reported losses of $8.9 million.
Cardarelli did not receive a bonus in fiscal 2000 when Agway lost $9.4 million or this year, when the cooperative lost $98.2 million - of which $85.4 million was directly related to the sale of discontinued, or sold, operations.
However, Cardarelli's salary was boosted from $521,548 in 2000 to $560,040 this year.
Michael Hopsicker, executive vice president of agriculture and energy and president of Agway Energy Products LLC, received a $420,000 bonus in fiscal 2002. In 2001, his bonus was $210,750; in 2000, it was $51,000 bonus. Hopsicker's salary in 2002 was $373,309, up from $248,278 in 2000.
Agway Energy Products and Telmark, Agway's leasing division, were not part of the bankruptcy filing. They are separate companies owned by Agway.
Roy S. Lubetkin, president of the Country Products Group, got a $437,567 bonus in fiscal 2002, more than his $350,000 salary. He got a bonus of $29,167 in 2001. He joined Agway in April 2001.
Daniel Edinger, president of Telmark, got a $298,000 bonus in 2002, greater than his 2002 salary of $230,000. In fiscal 2001, he got a $222,680 bonus; the year before, he got a $184,950 bonus.
Gerald R. Seeber, chairman and president of Agway Insurance Group, saw his salary increased from $228,288 in 2000 to $335,020 this year. Seeber also received bonuses totaling nearly $307,000 over those three years while being reimbursed about $373,000 for moving-related expenses.
Agway spokesman Stephen Hoefer said Agway is up front about the bonuses. The coop's top managers got bonuses in fiscal 2002 as part of their incentive plans, he said. Executives have to meet certain financial targets and other incentives to quality, he said.
"We have to be competitive and reward people for what they control," he said.
Telmark set records for its sales while profits rose 17 percent this past fiscal year, Hoefer said. He noted that Agway Energy also was a profitable operation.
Meanwhile, some Agway farmer-members were asking why executives were pulling in big bonuses when the company's financial performance was so weak.
"I don't think anyone has done a good job," said Richard Stewart of Bath. "And the bonuses are very generous. I don't think they should ever be more than 10 percent of one's salary."The Associated Press:
