New Foot Locker Executive Scores Big Comp Package

June 29, 2009

Who can blame Ken Hicks if he has a new spring in his step? Foot Locker just hired him to be its new President and CEO, and the exhibit to the 8-K that the company filed Friday afternoon reveals that he’s scored a lucrative pay package for his work.

Hicks is no stranger to the world of footwear. He served as the president of Payless Shoe Source, Inc. from 1999 until 2002. After he left Payless, he went to J. C. Penney, where he most recently served as the company’s president and Chief Merchandising Officer. He was paid very well at Penney’s; according to this proxy filed March 31, 2009, he earned a total compensation package worth more than $4.3 million, the base salary portion of which was $885,000.

Yet the Foot Locker gig promises to be even better. When Hicks starts his new job on August 17, 2009, he—ll earn $1.1 million in salary. He—ll get another $2 million as a signing bonus ($1 million within 30 days after starting the job, and another $500,000 on each of the next two anniversaries). He stands to earn nearly another $1.4 million under Foot Locker’s Annual Incentive Compensation Plan and just under another million under the Long-Term Incentive Compensation Plan. Sprinkle in some other goodies — stock options, restricted stock grants, a car service for work in New York and another $40K for a car, up to $15K for legal fees to negotiate this deal with Foot Locker, plus more, and — well, it’s not hard to see why Hicks is leaving Plano, Tx for Manhattan.

Even so, Hicks’s deal is still less than Foot Locker’s current chairman, president, and CEO, Matthew Serra, makes. In 2008, Serra’s base salary was $1.5 million. According to this exhibit to Friday’s filing, Serra will continue as the Chairman of the Board after Hicks steps into the president/CEO role in August. Since compensation is not one of the terms addressed in his Amended Employment Agreement, apparently Serra will continue to earn his current salary until he completely retires at the end of next January.

Indeed, the whole arrangement sounds eerily similar to PacSun (PSUN) CEO training program that we footnoted last week. Which makes us wonder why seemingly experienced executives need a highly paid babysitter to hang around?

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