Business today

Compiled from Times wires

© St. Petersburg Times, published April 12, 2001

FREQUENT FLIER PROGRAMS TO MERGE EVENTUALLY: American Airlines frequent-flier members can use their miles on TWA, but TWA customers will have to wait before receiving reciprocal treatment. A spokesman for American said the carrier won't allow TWA miles to be used on American until a court approves a merger of the two frequent-flier programs. Six months after approval is granted, TWA frequent-flier members -- along with their accumulated miles -- will be switched automatically to American's AAdvantage program. American completed its purchase of Trans World Airlines Inc. this week, buying the carrier out of bankruptcy for $742-million plus the assumption of $3.5-billion in debt.

KODAK NAMES PRESIDENT: Eastman Kodak Co. named former Lucent Technologies Inc. executive Patricia Russo president and chief operating officer. Russo, 48, will run Kodak's consumer business, which includes its digital imaging operations and film sales. Russo, who left Lucent in August, re-emerged in December as board chairwoman atAvaya Inc., a 2000 Lucent spinoff that is one of the largest providers of office telephone systems for businesses and government agencies.

PENNEY CEO GETS $16.5-MILLION PACKAGE: J.C. Penney Co. Inc. paid new chief executive Allen Questrom $16.5-million in cash and stock last year, plus options potentially worth $89.6-million if he can revive the department store's stock to 10 percent annual growth. If the shares gain 5 percent a year, the CEO could still reap as much as $35.4-million before the options expire, the Securities and Exchange Commission filing estimated. Separately, departing J.C. Penney Co. chairman and chief executive James Oesterreicher received a severance package valued at $3-million upon his retirement last year. Oesterreicher was paid $1.2-million in salary and bonus in 2000. Penney's shares rose 37 cents to $16.43.

MUTUAL FUND CUTS STAFF: Putnam Investments, the fourth-biggest U.S. mutual fund group, has fired 256 employees. The cuts, which amount to 4 percent of its work force, make Putnam the second major fund company to pare staff as stock prices have slumped. The reductions come as Putnam has seen its assets slide to $321-billion at the end of March from more than $400-billion a year ago as stocks have plunged.

DAIMLER SHAREHOLDERS TARGET CHAIRMAN: DaimlerChrysler AG chairman and chief executive Juergen Schrempp won support from a majority of shareholders attending the company's annual meeting, withstanding calls for him to quit as losses mount at the automaker's Chrysler unit. DaimlerChrysler shareholders vented their anger at the automaker's management for a buying spree that turned sour, saddling the maker of Mercedes cars with troubled U.S. and Japanese divisions. Schrempp told the 9,400 shareholders that a Chrysler rescue plan revealed in February is on track, and he flatly rejected any suggestion the company cut its losses and sell Chrysler. "We do not run away from problems," said the 56-year-old former Mercedes mechanic. "We solve them."

MODEM FLAW DISCOVERED: A popular brand of high-speed modem has a flaw that could allow hackers to take control of a computer user's Internet connection or cut it, security experts said. The flaw in the modem, manufactured by Alcatel, could allow a hacker to shut down a user's connection or take control of many of the modems to flood a Web site with messages, similar to attacks that shut down CNN.com, eBay and other popular Web sites last year. Alcatel said in a statement it does not plan to update the modem's software and instead advised its users to install protective software to overcome the flaw.

KFORCE EXPECTS TO TOP FORECASTS: Kforce.com Inc. said it expects to exceed earnings expectations for its first quarter. The Tampa staffing company said after the close of regular market trading that it expects per-share earnings of 7 cents to 9 cents, topping forecasts of 4 cents. Kforce will report first-quarter results April 25. Kforce shares rose 3 cents to $4.02 prior to the announcement.

FPL SEEKS HIGHER RATES AGAIN: Florida Power & Light Co. is asking state regulators to allow it to recover another $13.4-million from customers, including $9-million for an efficiency incentive program. The utility said it was too early to tell whether customers' bills will increase if the request is approved because it depends on the cost of fuel. The Public Service Commission will vote on the request at its November hearings. The request comes after a 9 percent rate increase in January and another 9 percent increase in April to cover higher fuel costs. If approved, the company could start collecting the money in January 2002.

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