Other items: Cell Therapeutics CEO given raise, bonus opportunity; No bump for execs after Bexxar slump; and Paccar can't omit shareholder plan, SEC says.
Ten 737 jets ordered by German airline
Boeing announced yesterday a firm order worth $655 million at list prices for 10 Boeing 737-800 jets from Hapag-Lloyd, a German charter airline that flies vacationers to destinations around the Mediterranean.
Hapag-Lloyd, owned by TUI Travel Group, was the launch customer for the next-generation 737-800 and has one of the largest fleets of this model in Europe.
Sebastian Ebel, manager of TUI’s airlines, said Hapag-Lloyd will phase out its aging Airbus A310s and standardize its fleet with the 737-800.
The order was signed in late December and will be included in Boeing’s 2004 sales tally.
CEO given raise, bonus opportunity
Cell Therapeutics Chief Executive James Bianco will receive a $650,000 base annual salary — up 41 percent from 2003 — and an opportunity to earn a bonus that’s at least 50 percent of his base salary under a new employment agreement with the Seattle biotech company, according to a filing yesterday with the Securities and Exchange Commission.
The contract runs from Jan. 1, 2005, to the end of 2008.
Bianco is also due to receive 200,000 shares of common stock over the next 30 days, which will vest the day Cell Therapeutics wins Food and Drug Administration approval to sell Xyotax or Pixantrone, a pair of experimental cancer drugs in late-stage clinical testing. The shares will vest as long as the FDA approval comes before Jan. 1, 2007.
No bump for execs after Bexxar slump
Corixa said Chief Executive Steve Gillis will not receive a raise in 2005, according to a filing yesterday with the Securities and Exchange Commission. Gillis’ salary remains at $500,000.
Gillis and other senior executives, including Chief Financial Officer Michelle Burris, Chief Operating Officer David Fanning and General Counsel Kathleen McKereghan, will not receive any incentive bonuses or stock-option grants related to their performance in 2004, according to the filing.
The company fell far short of its 2004 sales goals for cancer drug Bexxar. In December, Corixa turned over the drug to its partner, GlaxoSmithKline, and cut 160 employees.
Shareholder plan can’t be omitted
Paccar can’t omit from its proxy ballot a shareholder resolution Paccar said was too opinionated, the Securities and Exchange Commission said.
The SEC staff told corporate lawyers in September that it wouldn’t give companies permission to exclude proposals on grounds they contain opinions or disputed facts.
The Paccar resolution, submitted by shareholder-activist John Chevedden, calls for annual director elections. The Bellevue-based truck maker tried to bar it because it included a list of corporate-governance policies Chevedden said are objectionable.
Paccar said in a letter to the SEC that the objections listed in the resolution were “irrelevant” and “likely to mislead and confuse reasonable shareholders.”
Lawmaker pushes for execs’ bonuses
U.S. Rep. Richard Baker, R-La., requested that Fannie Mae’s regulator require interim Chief Executive Officer Daniel Mudd, his ousted predecessor Franklin Raines, and other current and former executives to give up millions of dollars in bonuses dating to 2001.
Fannie Mae’s directors on Dec. 21 removed Raines and Chief Financial Officer Timothy Howard after the Securities and Exchange Commission ruled that from 2001 until 2004 the company made mistakes in accounting for contracts designed to protect its $913 billion of mortgages and mortgage securities from swings in interest rates.
Fannie Mae, the largest source of money for the U.S. mortgage industry, said in November that the errors may lead to a $9 billion restatement of earnings. Raines in 2003 earned $20 million in base salary, bonus, stock grants and long-term incentive payments, an 8 percent increase from 2002.
Baker is chairman of the subcommittee that oversees Fannie Mae.
Fannie Mae spokeswoman Janis Smith declined comment. Kevin Downey, Raines’ attorney at Williams & Connolly, and Steven Salky, Howard’s attorney, didn’t return phone calls requesting comment.
U.S. dollar keeps up rally against euro
The dollar kept up its post-holiday rally yesterday against the euro, which dropped below $1.32 for the first time in more than three weeks on weak economic data from Germany and suggestions that U.S. interest rates will rise.
The euro traded at $1.3172 in late New York trading, down from $1.3259 late Wednesday and nearly 5 U.S. cents short of its all-time high, reached Dec. 30, of $1.3667.
The 12-nation currency has risen from $1.20 since September, powered by concern over the wide U.S. trade and budget deficits. It last traded below $1.32 on Dec. 13.
Positive U.S. economic data this week — along with minutes of the U.S. Federal Reserve’s Dec. 14 meeting, released Tuesday, that showed policy-makers suggesting that short-term interest rates need to move higher — have helped the dollar recover from its weakness during thin, volatile trading around Christmas.
Higher U.S. interest rates make U.S. bonds more attractive to investors, thereby supporting the dollar.
Marsh & McLennan
Insurance broker pleads guilty to fraud
An insurance broker at the Marsh Inc. subsidiary of insurance-brokerage giant Marsh & McLennan pleaded guilty yesterday to criminal charges related to fraud and bid-rigging and is expected to cooperate in the broad investigation of industry practices.
Robert Stearns, 40, a senior vice president and Marsh Inc. employee for more than 20 years, entered the plea in Manhattan’s State Supreme Court to first-degree scheme to defraud, which is punishable by up to four years in prison.
Stearns admitted that from September 2002 into 2004 he instructed insurance companies to submit noncompetitive bids to obtain business contracts, and he conveyed these bids to Marsh clients under false pretenses.
CEO quits; reserves for liabilities to rise
In a flurry of announcements, the ACE insurance company said the chairman and chief executive of its ACE USA unit had resigned and that it was increasing reserves for liabilities from asbestos and environmental claims. The change in reserves will result in an after-tax charge of $298 million in the fourth quarter of 2004.
The Bermuda-based company — in statements released late Wednesday and early yesterday — also said it planned to sell several units of its Brandywine subsidiary to Randall & Quilter Investment, which is based in London. The units are so-called run-off companies to manage asbestos and other reserves, some of which ACE took on with its 1999 acquisition of Cigna’s property and casualty-insurance business.
Walt Disney Co.
Guidelines amended to split execs’ offices
The board of The Walt Disney Co. said yesterday it has amended its corporate-governance guidelines to separate the offices of chairman and chief executive.
In addition, the entertainment giant disclosed that Chief Executive Michael Eisner had received a $7.35 million cash bonus in 2004. With his salary of $1 million and other compensation, Eisner’s total pay package was $8.3 million.
Robert Iger, Disney’s president and chief operating officer, was paid a cash bonus of $6.5 million. With his salary of $1.5 million and other compensation, Iger’s total pay package was $12 million.
Tariffs on shrimp upheld, with proviso
NEW ORLEANS — The U.S. International Trade Commission (ITC) yesterday cleared the way for tariffs to be imposed on shrimp imports from six Asian and South American countries, but expressed concern that tariffs on India and Thailand would burden the tsunami-ravaged countries.
The ITC upheld last February’s preliminary finding that imports had injured, or were likely to injure, U.S. shrimp processors and fishermen. The panel reaffirmed with a 6-0 vote that frozen shrimp have hurt the U.S. industry but voted 4-2 to scrap tariffs on canned imports, which make up about 0.4 percent of imports.
The ruling was the last major step before tariffs on imports from Brazil, China, Ecuador, India, Thailand and Vietnam become final.
While upholding its decision on frozen shrimp, the ITC left open the possibility of revoking tariffs on India and Thailand. The ITC will review how severely the shrimp industries there have been damaged and decide if the tariffs should be lifted.
Compiled from Seattle Times staff, The Associated Press and Bloomberg News.