Doubled for what?

April 11, 2006

Late Friday, Bon-Ton Stores (BONT) filed an 8-K that mentioned — almost in passing — that it had given director Michael Gleim, who has a consulting contract with the retailer, a hefty raise by more than doubling his consulting fee from $75K a year to $180K a year. Gleim, a former vice chairman at Bon-Ton — a job title I’ve written about here — was also the retailer’s chief operating officer between 1995 and 2002.

But the hefty increase without any real explanation on why Gleim’s salary was more than doubling made me go back and look at earlier filings, which only led to more questions. For example, back on Dec. 1, Bon-Ton disclosed in this 8-K that it had just extended Gleim’s consulting contract through December 2006. And a quick review of the proxy revealed that Gleim made $173K in consulting fees in 2004 and $201K in 2003. The company also kicked in an additional $50K both years toward his retirement. Of course, the real question is why would the company enter into a consulting agreement four months ago for $75K only to raise it to $180K now? And exactly what additional services is Director Gleim providing for the big increase in his consulting fee?

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