3. Ralph's Throne Game
Will some poor Furniture Brands International (FBN) shareholder please kick the chair out from under CEO Ralph Scozzafava? There is no good reason for him to sit so comfortably while his company and the rest of the furniture industry struggle to get a leg up.
After threatening to slash roughly $1.7 million in public funding for the state's biannual High Point furniture market, North Carolina Gov. Pat McCrory changed his mind Tuesday. The governor reportedly restored the funds after learning that the struggling furniture industry was too tapped out to make up the deficit.
Well, everybody except King Ralph that is. He's got plenty of cash to kick in, but he'd rather send his signature instead.You see, a day before the governor performed his about face, 40 furniture company presidents and CEOs -- including Scozzafava -- sent a letter to North Carolina legislative leaders begging them not to cut funds for the market. The executives explained to the lawmakers that the economic value of the two events is comparable to "hosting two Super Bowls in North Carolina every year" since they generate about $40 million in tax receipts vs. the state's investment of roughly $2 million. Despite the fact that McCrory caved, we still cannot get over the irony that the furniture industry is groveling for subsidies to save itself -- and Furniture Brands is bleeding red ink -- even while Ralph is giving himself a raise. We're not kidding. According to an SEC filing just last week, Scozzafava signed a fat new deal to stay on as chairman and CEO of the company through April 2016. Furniture Brands increased his base salary from $750,000 a year to $800,000 a year, effective April 1. In case you were wondering, Scozzafava received total compensation of $1.98 million last year, up 9% from 2011 and far more than enough to singlehandedly make up for the state's High Point shortfall. And if Ralph had the slightest bit of dignity he would have sent over his entire paycheck instead of his John Hancock. Furniture Brands lost $47.3 million last year, compared to a net loss of $43.8 million for 2011. Sales at the company fell 3% last year to $1.07 billion. The company has also reportedly been delinquent in paying vendors, even as it pads its CEO's pockets. Meanwhile, shares of Furniture Brands closed at $1.12 on Tuesday's High Point announcement, down 87% since Scozzafava took the company's throne in January 2008. If only North Carolina's governor could go back in time and reverse that fateful decision then maybe there would be a lot more money for everybody.
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