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CEO's Pay Jumps After Turnaround at Platinum

September 26, 1998|P.J. HUFFSTUTTER | TIMES STAFF WRITER

As a reward for turning around Platinum Software Corp., Chairman and Chief Executive L. George Klaus received a 52% increase in salary and bonus, taking home $1.03 million last year.

Klaus' pay package was disclosed Friday in Platinum's annual proxy statement. He received a 5.5% increase in his base salary, to $527,500, and a bonus of $509,456, for the fiscal year that ended June 30. That bonus was nearly triple his previous year's bonus of $180,000. Publicly traded companies are required to report the annual compensation of their top five officers to the Securities and Exchange Commission each year.

Platinum, an Irvine maker of financial-management software, suffered through an accounting scandal in 1994 and lost most of its top executives at that time.

But the company has rebounded and enjoyed healthy growth after Klaus, known as a Silicon Valley turnaround specialist, joined Platinum's executive team in 1996.

The company reported a $13.3-million profit for fiscal 1998, a sharp rebound from a $4.4-million loss the prior year. Revenue jumped 62%, to $98.5 million, and its stock price more than doubled, to about $25, in late June, up from about $10 a share in June 1997.

Investors also link Platinum's success with Klaus. The company's stock recently tumbled nearly 38% on rumors that he might resign and that Platinum's earnings might fail to reach analysts' projections. Klaus denied the rumors, and the stock quickly rebounded. On Friday, Platinum shares were unchanged, at $10.94, in Nasdaq trading.

Klaus' total compensation for 1998 totaled $1.47 million, down slightly from the $1.54 million he earned a year earlier. Contributing to his 1998 pay was $423,058 in waived interest on $7 million in loans from the company.

As part of Klaus' incentive package, Platinum loaned him money to buy 2 million shares of company stock at $3.50 a share, officials said. As of Friday, that $7 million had grown to $21.9 million.

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