Danka execs' pay jumps

The two top officers will get millions more in incentives if they remain with the company.

By ROBERT TRIGAUX

© St. Petersburg Times, published May 30, 2000

ST. PETERSBURG -- The two top executives of Danka Business Systems plc saw their salaries and bonuses jump by 21/2 times last year, and they are poised to gain additional incentive pay worth millions more.

Danka chief executive Larry Switzer saw his salary increase rise from $329,000 to $800,000 and his bonus soar from $450,000 to $1.17-million in the fiscal year ended March 31, compared to the previous fiscal year. Together, Switzer's salary and bonus rose from $779,000 to $1.97-million.

Danka president and chief operating officer Brian Merriman similarly saw his salary increase rise from $400,000 to $650,000 and his bonus climb from $232,000 to $949,000 in the latest fiscal year. Combined, Merriman's salary and bonus increased from $632,000 to $1.6-million.

The rewards, outlined in the company's annual proxy statement filed with the Securities and Exchange Commission, reflect what Danka's board of directors considers success in reaching financial goals during the year.

Danka, after an ill-fated merger with Eastman Kodak's copier service business, forced the exit of founder Dan Doyle and in 1998 brought in Switzer and Merriman to turn the company around. Danka has struggled for years to pare costs and return to profitability.

Danka earned $13.4-million in the most recent fiscal year after losing $295-million the prior year. But in an unhappy surprise to Wall Street, Danka lost $15.5-million in the quarter that ended March 31.

The company's stock price, which hovered near $5 a share a year ago, increased to more than $14 during the year before falling back to just below $5 this month. Danka shares closed Friday at $4.56. (Monday was a market holiday.)

As further enticement to Switzer and Merriman to remain at Danka, the board wants to pay them an additional $3-million and $2-million, respectively. The extra compensation would be in the form of company stock and cash paid out over the next three years. The extra compensation package will be voted on by shareholders at the annual meeting, scheduled for July 11 in London.

The Danka proxy also noted that Danka general counsel David Berg has resigned from the company effective . And Paul Umberg, vice president of Danka's U.S. divisions, retired March 31.

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