Industry News | April 16, 2002

Krispy Kreme's CEO Livengood Got a 13% Raise Last Fiscal Year

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ATLANTA -- As reported by Rick Brooks of The Wall Street Journal: Krispy Kreme Doughnuts Inc. (KKD), which saw its profit rise sharply last year, boosted the annual compensation of its chairman and chief executive, Scott A. Livengood, by thirteen percent and increased the number of stock options awarded to him by more than tenfold.

Livengood, forty-nine years old, received a salary of $450,000 for the fiscal year ending February 3rd , according to proxy materials Krispy Kreme filed Tuesday with the Securities and Exchange Commission -- a twenty percent boost from his 2000 salary of $375,000. He also got a bonus of $714,751, up four percent from $686,045. Livengood's total annual compensation rose to $1.28 million from $1.13 million.

The compensation committee of the Winston-Salem, North Carolina, doughnut maker's board said Livengood's salary increase reflected the "significant value created by [his] leadership," as well as the company's "strong earnings growth" and balance sheet. His bonus increase was based on Krispy Kreme's performance in four categories, including per-share earnings and customer satisfaction, according to the proxy.

Livengood was awarded options to acquire a total of 582,800 shares with exercise prices ranging from $15.13 to $31.93 a share and potential realized value of $6.1 million if Krispy Kreme's stock price climbs at an annual rate of five percent. Livengood got twenty-seven percent of all options awarded to the company's employees during the fiscal year; he was awarded options on 45,400 shares in fiscal 2001.

Krispy Kreme saw its fiscal 2002 net income surge seventy-nine percent to $26.4 million, or 45 cents a share, from $14.7 million, or 27 cents a share, a year earlier, boosted by higher profit from company stores, dough-making and franchises. The company's share price more than doubled to $39.02 as of February 3rd from Jan. 28, 2001 , the end of Krispy Kreme's previous fiscal year, compared with a twelve percent decline in the New York Stock Exchange's composite index.