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10/3/04
COMPENSATION When Martha Stewart starts serving a five-month prison term this month for lying about a stock sale, she'll have something most inmates won't: a five-year employment contract guaranteeing a yearly salary of $900,000 and bonuses ranging from 55 to 150 percent of her base salary. The provision is part of an employment agreement that Stewart's firm, Martha Stewart Living Omnimedia Inc., reached with the domestic diva in September, according to papers filed with the Securities and Exchange Commission. Among other things, the contract says Stewart will continue to serve as founder and chief editorial and media director, even though she will be incarcerated at a federal prison in West Virginia for five months, starting Friday, and will be under house arrest for another five months after her release. Legal and business specialists say Martha Stewart Living is so dependent on Stewart that it would be detrimental to the firm to terminate her employment. Stephen Mader, vice chairman of Christian & Timbers, an executive search firm, said Stewart continues to wield power, even though she was convicted on charges relating to the sale of shares of ImClone Systems Inc. She owns a majority of the shares in Martha Stewart Living, and she is still highly regarded by consumers, employees, and colleagues. ''I would guess that most of the people who work at the company are big supporters of Martha Stewart,'' said Mader, who is based in Boston. ''When she was convicted, she became the underdog. So, when people see that she will keep her official post and will collect $900,000, they will think that it is smart for the company. ''Martha Stewart is still the principal owner of the company,'' he said. ''No one has taken that power from her, and she has made a decision that she will carry on a role with the company in absentia and will be paid for it.'' Mary Ann Jorgenson, head of the business practice at the Cleveland law firm of Squire, Sanders & Dempsey, said keeping Stewart on the payroll probably is perceived by many in the business community as a wise decision. ''The person who is the idea machine for the business, and that is Martha Stewart, is still very critical to the success of the business,'' Jorgenson said. ''To throw her out with the bathwater would not be doing the best thing for the company and its shareholders. So, one part of the company and the board may conclude that they really need her talent. They may have executive and administrative replacements for her, but they do not have the genius that she had brought to the theming and, for that matter, actual production.'' Jorgenson said Stewart is so much in demand that, if pushed out, she could directly compete with Martha Stewart Living following her release from prison. ''Martha Stewart is under a noncompetition agreement now, but if they terminated her, I suspect that there is a definite limit as to how long she would be prevented from competing against them,'' said Jorgenson. ''She could come out and create a whole new product line that would not be stealing any of their existing intellectual property, but could certainly devalue their product.'' Stewart is not entitled to earn her base salary or annual bonus while in prison or home confinement. However, the company paid Stewart $200,000 when the agreement was signed, according to the SEC filing, and agreed to provide her with automobiles and drivers and pay her an annual expense allowance of $100,000.
WORKPLACE Three Boston employers have been named in Working Mother magazine's annual list of 100 top companies for moms who work: Blue Cross and Blue Shield of Massachusetts, MITRE Corp., and Harvard University. The list, in the October issue, was compiled from information the magazine gathered on benefits, pay scales, and promotions of women who have children. Blue Cross and Blue Shield offers a range of benefits, including flexible scheduling options for men and women. In addition, 75 percent of its workers are women, according to Working Mother. It also sponsors two on-site child-care centers at offices in Boston and Quincy, and offers backup day care for $15 per day. That's not all. ''Women on maternity leave get six weeks at full pay and can take advantage of private pumping rooms when they return to work,'' said Working Mother. ''Roughly 25 percent of Blue Cross executives are women, as are 13 percent of its board of directors.'' The company also allows full-time claims processors to work from home. The magazine reports that Harvard's 16,400 staffers ''have a secure financial future'' because ''Everyone on its payroll is eligible for an employer-paid pension after only six months on the job,'' said Working Mother. ''Workers can also contribute to a 401(k) retirement plan.'' The university also offers mothers with one year of service eight weeks of leave at 70 percent of regular pay. Fathers and adoptive parents receive one week of paid leave. In addition, parents who adopt can get up to $5,000 in adoption assistance. The university also offers six on-site child-care centers. MITRE Corp., a nonprofit government contractor, has offices in Bedford and McLean, Va. Its staff receives a day off each week to attend graduate school classes, and workers who receive their undergraduate degrees while working are eligible for $4,000 bonuses. ''The MITRE Institute, an internal training division, offers some 400 job-related courses, which are also available through the Internet,'' said Working Mother. The magazine noted MITRE doesn't stint on benefits. Workers have access to compressed workweeks, flex time, and a paid-time-off bank with up to 28 vacation or sick days per year, depending on seniority. In addition, new mothers with a minimum of one year on the job receive six weeks off with full pay. And for nursing mothers, there are private rooms.
RECRUITING Executives who can clearly state their objectives and have handled significant business challenges get top marks from recruiters during job interviews, according to a survey of 1,400 chief financial officers. The survey, by Robert Half Management Resources, reveals that when the CFOs were asked to describe qualities other than technical skills or business knowledge that are most impressive in senior job candidates, 34 percent pointed to verbal skills. The same percentage said problem-solving abilities were crucial. Thirteen percent said they are impressed by applicants who are confident, 4 percent are interested in candidates with superior negotiating skills, and 3 percent said the applicant's personality and character are likely to impress them. Only 2 percent said they were especially interested in the ability to work on a team. --DIANE E. LEWIS
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