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Herman Miller Cuts Board Salaries

Wednesday 4 March 2009

Apparently, a 10 percent salary cut isn\'t enough. Herman Miller is further cutting executive salaries in response to what is becoming one of the worst-ever industry recessions.
Herman Miller announced Wednesday that the company\'s Executive Compensation Committee and Board of Directors approved a further reduction in the annual base salary of Chief Executive Officer Brian Walker and certain other executive officers, effective March 9. The adjustments are in addition to the Jan. 7 executive salary cuts, which slashed salaries by more than 10 percent and cost executives 50 percent of their long-term incentives.

Walker\'s salary was reduced from $720,000 to 583,000 a year, a 19 percent reduction. The rest of the executive team will take a 14 percent pay cut. Curt Pullen\'s salary will drop from $350,000 to $300,000. Ken Goodsen\'s salary will go from $270,000 to $231,000. Andy Lock\'s salary was reduced from $330,000 to $283,000. In addition the Executive Compensation Committee reduced by 10 percent the annual base salary of the corporate officers whose salaries were not adjusted in January 2009 and reduced by 50 percent the target value of the July 2009 Long Term Incentive grants to be given to the corporate officers.

The salary cut comes on the heels of job cuts at Herman Miller. A few weeks ago, the company announced it would cut 110 more jobs. The company has cut more than 1,000 employees since the recession began this past fall.

Herman Miller isn\'t alone in adjusting its workforce and cutting salaries. Herman Miller competitors have done the same in recent months.

The salary cut announcement comes days after the Business and Institutional Furniture Manufacturers Association reported that office furniture orders and shipments fell about 25 percent in January, reflecting the biggest year-over-year percentage declines since the 2001-02 recession. The Business and Institutional Furniture Manufacturers Association said January orders fell 25 percent to $565 million and shipments fell 26 percent to $630 million.

BIFMA also lowered its 2009 forecast for orders to a decline of 26.5 percent, compared with its prior estimate of a drop of 11.6 percent. It now sees shipments falling 19.3 percent versus its previous forecast of a decline of 13.1 percent.

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